NeighborWorks Announces Free Tax Services for Certain Homeowners

For homeowners who may have faced a foreclosure or obtained a modification in 2012, there may be free tax advice available through a ""NeighborWorks America"":http://www.nw.org/network/index.asp organization.

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NeighborWorks announced several of its organizations provide free tax preparation services for low- and moderate-income clients.

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Many of the organizations also work in partnership with the Volunteer Income Tax Assistance (VITA) program sponsored by the IRS. The organization's VITA providers can offer direct help or refer homeowners to tax preparers who are qualified and offer services at an appropriate price.

Overall, NeighborWorks supports a network of more than 235 nonprofits in every state, plus the District of Columbia and Puerto Rico.

""Homeowners going through a foreclosure need to track their gain or loss for tax purposes and also address any income tax that might be due on the forgiveness or cancellation of debt,"" NeighborWorks explained.

With the ""extension of the Mortgage Debt Relief Act"":http://dsnews.comarticles/mortgage-debt-relief-act-to-see-another-year-2013-01-02, many homeowners who did go through a short sale, foreclosure, or loan modification may receive a break from paying taxes on forgiven debt.

NeighborWorks also warned of scammers and even advised against 'low-cost' quick refund services, which it stated could harm taxpayers in the long-term.