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Finances in Recovery: How to Get Your Money Right in Your New Life

Time for Taxes Planning Money Financial Accounting Taxation and Individual income tax return form

It’s tax season! If you earned over a certain threshold last year, even if you were struggling with addiction at the same time or spent most of the year in an addiction treatment program, it is time to figure out what you owe Uncle Sam. Whether or not you owe a lot, nothing at all, or expect a big refund, here’s what you need to know to make your finances work for you as you prepare to build a strong start for yourself in recovery.

If You Owe Taxes

If you will owe taxes this year and you are thinking you can table the matter until you deal with other things in your life, think again. Unpaid taxes can destroy your financial stability, so even if you owe and do not have the money, there are a few things you should consider as you decide how to handle the situation.


  • File on time. Don’t let fear of the unknown or fear of a big tax bill stop you from filing your taxes. If you file late, it will only make things worse; you will be charged a late fee plus significant interest that starts stacking up right away unless you file an extension.
  • Plead your case. If you are choosing not to file because you can’t pay what you owe, file on time anyway and request that they set up a reasonable payment plan with you. It can’t hurt to write a brief letter explaining what you have been through in the past year in recovery, outlining the progress you are making, and asking for a specific monthly amount to repay your debt.
  • Do not ask to be forgiven. Everyone has a reason why they do not want to pay their taxes. Your story is no worse than thousands of other people’s stories. It is a far better use of your time to ask for a manageable payment that you know you can pay.
  • Uncle Sam gets paid first. If you owe taxes, even if you owe a lot of other people money, you must prioritize the payment to the IRS. If you do not pay them at all, they will garnish your wages, and in the meantime, the interest will continue to pile onto the principal creating nightmarish debt.

If You Owe Nothing

If you didn’t work at all or enough last year and owe no taxes, great! It’s one less thing to worry about when it comes to creating your new budget. However, you should still file. Why? It documents that you do not owe any taxes and stops you from potentially dealing with the hassle of an IRS audit later or, worse, a letter telling you that you do owe a bill because a business or other entity erroneously charged earnings to your Social Security number.

If You Get a Refund

Congratulations! It can feel like a windfall – the next best thing to winning the lottery. The fact is, though, it is your money you are getting back from the federal government – money you could have gotten throughout the year. If you get a refund, remember these things:

  • If you are still working at that same job, you can make adjustments to your withholdings so you can get your money over the course of the year and use it to your advantage instead of “loaning” it to the government with no return over the course of the year.
  • This money can help you to really move the needle on your goals, such as paying off debt, building up an emergency fund, or putting a down payment on a new place to live in recovery.
  • Large amounts of money can trigger cravings and relapse. It is important that you have a plan in place and someone responsible – perhaps a therapist as well as a family member – who is willing to hold you accountable for how you make use of the money.
  • If you are unsure how best to put your refund to work for you, it can help to build out a budget, consider your financial goals, and put away some savings if you have no debt and are currently living in a sober, safe place.

How are your taxes playing into your plan for the future in recovery?

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