Tax Tips for the Unemployed
(The Network Journal) — If you were among the millions out of work at any point in 2010, your tax return may look quite different this year. Many people fail to realize that they must pay taxes on unemployment benefits. For 2010 all unemployment benefits received will be considered taxable income. That is a big change from 2009 when a temporary exemption was granted for the first $2,400 received. Some states withhold part of the unemployment benefit so recipients don’t get socked with a big tax bill, but that’s not a requirement, said Melissa Labant of the American Institute of CPA’s tax team. That means you might be on the hook for taxes on the full amount of your benefits. Fortunately, there’s a host of deductions and tax credits that can help offset any tax you owe, or increase your refund.
Job search: Certain expenses can be deducted if you’re looking for a job in your most recent occupation. That means similar job titles in different industries, like administrative assistant or customer service manager, would qualify. Costs for a search that enabled you to switch from being an elementary school gym teacher to a restaurant chef wouldn’t make the cut. Fees for resume preparation, job counseling and employment agencies may be claimed. And, if you kept a log of telephone calls, you may be able to claim a portion of your phone bill.