Hit Hard Financially by the Coronavirus Recession? Watch Out for These 2 Tax Traps

Taxes are a certainty -- we learned that from founding father Ben Franklin's famous quote, "Nothing is certain except death and taxes." But the amount of income taxes you pay each year is a moving target based on your income. If you're one of millions hit hard financially by the coronavirus recession, your efforts to stay afloat may leave you with a surprise tax liability.

In March of 2020, the federal government passed the CARES Act, a $2 trillion relief package to help households and small businesses manage the economic shutdowns prompted by the coronavirus pandemic. The CARES Act enabled stimulus checks, small business loans to cover payroll, and even financial assistance to state and local governments. But there are two CARES Act provisions that could bring some surprises at tax time: expanded unemployment assistance and reduced restrictions on 401k withdrawals.

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Source Fool.com