How to File Taxes If You’re Unemployed
If you are unemployed, this does not necessarily exonerate you from filing your annual taxes. By law, every United States (US) citizen, except for children, must file their annual taxes. That includes those who are or were unemployed. Most people think that just because they are unemployed, that they don’t need to file annual taxes. Nothing could be further from the truth.
One might argue that if he or she is receiving an unemployment check, this proves that they don’t have a job to report their earnings to. This is also false. The US government requires everyone who has earned any income to report it to the Internal Revenue Service (IRS).
How Unemployment Actually Works
Usually when someone is unemployed, he or she is entitled to unemployment benefits. This means that the government will issue a weekly check to a person who is without a job. Of course, there are certain stipulations that apply. First of all, one must have come into the official status of unemployment through no fault of his or her own. This means that one cannot just quit his or her job just because their boss is too demanding or what have you. That person must also meet certain eligibility requirements according to the state where that person lives.
At any rate, if a person has met these requirements, then he or she is allotted a certain amount of money every week according to his or her most previous source of income as well as how much the individual earned in the past 12 months. Earnings of any kind, whether it is from an employer, contractual job(s), free-lancing, tips, lottery winnings, and yes, even unemployment checks are to be reported as income to the IRS.
Report What You Earned. It’s the Law!
It is also required to report how much a household has spent. This may seem like an overwhelming task, given that some people might struggle to balance their checking account, but the IRS has designed the 1040 and 1040 EZ Form for the less complicated filing.
Believe it or not, in some rare cases, people who are unemployed may find themselves owing the IRS! Again, this depends upon the circumstances of each individual case. At the same time, there are certain tax credits that the unemployed can take advantage of. Job seekers can write off the expenses of looking for a new job such as copying and mailing resumes, mileage and parking for interviews, and sometimes moving expenses.
For those who are recently unemployed, a person can choose to itemized his or her deductions instead of taking the standardized deduction that can range from $6,300 to $12,400 depending on whether one is filing as is single, head of household, married filing jointly or separately. Oftentimes, the total amount of the itemized deductions may exceed the standardized deduction.
Do You Need Help Filing?
If you were unemployed at anytime for the previous year and received any type of income, you still need to file your annual taxes. If you need help preparing your annual taxes this year, contact the experts at Success Tax Relief. We understand that there are many instances where a Certified Public Accountant may not be able to assist you with your case. The highly trained and skilled experts at Success Tax Relief are fully qualified to step right in and help you solve all of your tax problems. So give us a call today at 877-825-1179 or schedule a free consultation with us online now.