Filing Your Taxes Could be a Good Thing! What to Know This Tax Season if you are Unemployed
Many people assume that because they are unemployed and have no or very little earned income, there is no need to file a tax return. In some cases that may be correct, but in others you may actually have taxes due or be missing out on a tax refund by not filing.
With just a few weeks left until tax forms need to reach the IRS, here are some of the questions you should be asking yourself if you’re unemployed.
Who Has to File?
If you have been working odd jobs to make ends meet, the income you brought in for 2012 will be taxable only if you are under the age of 65, filing single, and made over $9,500, or married, filing jointly, and reporting over $19,500.
Income from a job is not the only source of taxable income. If you have been receiving unemployment benefits or monies from severance pay, both income streams add to your overall taxable income and should be reported for 2012.
If, from your combined income from jobs, unemployment insurance and severance pay you made below the amounts listed above, you are not required to file a tax return. Although you are not required, there may be credits you qualify for that could warrant a tax return. You don’t want to miss out by not filing!
Why You Should File a Tax Return?
There are several reasons to file a tax return this season even if you did not meet the minimum amount of taxable income.
- Taxes were withheld from your pay. If you made less than the minimum taxable income of $9,500 filing single or $19,500 filing jointly and taxes were withheld from your paycheck, you may be entitled to a tax refund.
- Student credits could apply. If you are a college student there are credits like the American Opportunity Credit that will give you up to a $2,500 for the first four years of post-secondary school.
- Other credits may work in your favor. There are other credits for those who did not earn a lot of money for 2012 like the Earned Income Tax Credit, Making Work Pay credit and the Additional Child Tax credit, which all could result in a refund for the 2012 tax season.
- You may be eligible for job search deductions. You may be able to deduct expenses related to your job search, which will decrease your tax liability and could increase your refund.
Where Do I Get Tax Help?
This is in no way a comprehensive list of taxable situations or benefits for filing taxes, so make sure you consult with a tax professional to ensure you’re on the right track with your taxes. Here are some resources to help you get tax advice:
IRS Fresh Start: Helps struggling tax payers to avoid penalties and make installment agreements more available.
Volunteer Income tax Assistance: Provides free tax preparation to those who earn less than $51,000 and need assistance preparing tax returns.
IRS2GO Mobile app: With this smart phone app users can access video, gen news and updates, request tax account transcripts and check their tax refund status.
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