Tax tips for the unemployed

Thanks, Bob, for sharing this article, written by Associated Press writer Eileen Aj Connelly:

"...Some jobless may think they don't ahve to file if they didnt' work throughout 2009. Others may have put off sending in their returns, fearing they owe taxes and can't afford to pay.

The reality is unemployment benefits are taxable income and must be reported...The silver lining is that a drop in income can make it possible to claim credits and deductions that were unavailable before, and could lead to a bigger refund than you expect."

Tips for filing when you're out of work:
1. According to Connelly, the first $2,400 of unemployment benefits is tax-free. You should have gotten a Form 1099-G showing youir benefits. If both members of a married couple filing jointly are unemployed, the tax free amount doubles to $4,800.

2. Your best option may NOT be the standard deduction. While it's easier to take, consider whether you can itemize your mortgage, high medical bills or other deductions.

3. Job-hunting expenses are deductible. According to Melissa Labant, a tax manager with the American Institute of Certified Public Accountants, "You don't actually have to get the new job in order to deduct those expenses." Qualifying expenses include job training programs, head hunters, career coaches, resume prep and transportation to/from interviews. You will need receipts and records to back up your claims, so gather the paperwork before you start your return.

4. Monetary gifts are not taxable. If a friend or relative gave you money to help you get through the crunch, you don't have to report it as income. Gifts may be taxable for the giver, depending on their circumstances, but are not for the receiptient.

P.S. - Gen members, if you want a copy of this article exactly as it apppeared in the newspaper, let me know at lynn@fpcdouglasville.org. I'll make a copy for you to pick up at our next meeting, on April 12th.