What tax tips do you have for the unemployed?
The current unemployment rate is 8.3%. So first, remember that you’re not alone. And when tax time comes around, make sure you take all the possible deductions. If you are looking for a job, you can deduct expenses like resume preparation, headhunters, postage and gas mileage. One critical caveat: You have to keep meticulous records and make sure you only claim legitimate expenses; If you try to deduct that interview suit, new haircut or manicure, the IRS will cry foul. One general rule of thumb to follow is that anything that can be used for purposes other than your job hunt can't be deducted.
Any other warnings?
Yes. You only qualify for tax deductions if you’re looking for a job within your industry. First-time job seekers like college graduates do not qualify; and neither do people headed back to the workforce after a long hiatus.
Job search costs must also exceed 2% of your adjusted gross income to qualify as deductible expenses, which shouldn't be a problem for most out-of-work job seekers, but could prevent some freelancers or self-employed taxpayers from being able to claim them.
And don't worry: You can still deduct the costs of a job search even if you weren't hired.
Any other deductions our listeners should remember?
Health care costs can be a major expense for many Americans, and unemployment can be a rude awaking after you’ve become accustomed to an employee-sponsored health plan with reasonable co-payments. After your health insurance coverage is extended for a few months by COBRA, you're on your own.
The good news is that you are allowed to deduct all un-reimbursed out-of-pocket medical expenses that exceed 7.5 percent of your adjusted gross income. That may seem like a high limit, but when you’re taking in a lower income, it’s easier to reach than you might expect considering all the medical expenses you can deduct, which include COBRA insurance payments or individual insurance coverage, out-of-pocket doctor's visits, unreimbursed hospital bills, prescription drugs, co-payments, and travel (mileage) for medical treatment. Again, be sure to save all your records and receipts.
Any other tips?
It might seem counterintuitive, but any unemployment compensation you receive from the United States government (both federal and state) is also taxable by the United States government. You have to claim those earnings. According to a survey, by H&R Block, nearly 40 percent of taxpayers had no idea that unemployment benefits were taxable.
To avoid the sticker shock of paying all of your unemployment compensation taxes in April, you can choose to have taxes withheld from your unemployment checks throughout the year. Just submit the appropriate tax documents to the office that sends you your benefits. As hard as it may be to budget, experts recommend you elect those withholdings on the front end.
And finally, although you’ll still have to pay taxes, you might qualify for free income tax filing. Anyone who has an adjusted gross income of $57,000 or less qualifies for free federal tax return through the IRS free file alliance program.
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This Week’s Celebrity Instagrams (11/26-12/2)
30 photos Launch gallery
1. Little Legend and Puddy 😍😍😍😍
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2. "You on point Phife?" "all the time,Tip". 💥 #bannedfromnormal
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3. Vegan! The Impossible burger at Crossroads
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4. Lawrence #BeforeandAfterEpisodes 1-4: 184lbs 13% body fatEpisode 8: 196lbs 8% body fat S/O @coachdaveboxing with the works outs and @kildareriordan with the nutrition
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5. Jus haaaanngin out
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6. Meanwhile back at home in Atlanta GA someone mad they not on the 🛳. 😳
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7. No limits... Photo cred: Chris Bridges @ludacris
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8. new new
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9. Apparently my 260lbs is too much for the actual vines in the Hawaiian jungles to hold me without breaking and me falling hundreds of feet. So for safety purposes, I'm forced to swing thru #Jumanjj on wires strong enough to hold 12 adult buffaloes and 1 adult Rock. #OnSet #Jumanji #IronicallyIEatBuffaloDailyForLunch #MoreManThanNatureKnowsWhatToDoWith
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10. hey ma! 🎎#wcw 💙
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11. Surprise visit to our factories!!! #GoodAmerican #USA
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13. Peachy Keen 🔥✨⚡️
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14. If this don't look thankful I don't know what does. Happy Thanksgiving to you and yours. #UltraBlessed #24kMagic #SweetPotatoFly
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15. Late nights @nbcmarlon with the writers... we in here!!!
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16. There goes my baaaaaaaaabbbbyyyyy #QueenKingMagic!!! We're up to something! Ira BIG!!! Stay out our buisness -
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17. You want to win every game you play but when you come home to these faces... who cares. #ILoveYouGirls best part of my day, everyday!
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18. Steady,steady..... full size jenga.. "I got this one "???? Or do I ?
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19. Cornrows kind of day 😉@dontaysavoy2 you convinced me and I love. ❤️️
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20. #BrotherlyLove #tbt
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22. #basel #TeamLOVE @kingcombs
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23. Just introduced a special screening of @directher 's groundbreaking (must see) documentary @13thfilm with my brother @themichaelealy | @unitedblackout #blackoutblackfriday
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24. Me & Vanessa Williams giving #DuckLips #Pose on the set of #DaytimeDivas @vh1 - Coming Soon to a tv near you. Lol. - My make up done by @makeupsurgeon
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25. This picture just makes me wanna praise the Lord, you hear me!!!!!! Yes Lord brotha #TEDDYCAMPBELL What a #man !!! You are everything right on this picture husband ......... #gorgeous #stylish #classy #strong #masculine #king #sexy #debonair #gentlemenstyle And that #bible in your hand just seals the deal for me (probably cause i know that, that is what helped you become just as amazing as you look😘). While my heart and mind experiences the goodness of God at #church on Sundays, my eyes experiences the goodness of Teddy😍. Amen somebody🙌🏽. "Bless the Lord oh my soul and all that is within me bless his holy name" #myman #myhusband #goodman #blackman #dapperman #godlyman #goodfather #mybestfriend
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26. Yesterday was my mama's 53rd birthday!!!!! Got to celebrate with her all day. If this is what I have to look forward to I can't wait. Looking like a soft bucket a cocoa butter. Yaaaaaaaaaas! 😍😍😍 love you mommy!
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27. "Shout out to @PureAtlanta for getting the family right"....I'm loving this jogger. 😍😍
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28. This pic warms my heart ❤️ #myLogiebeans and aunt aunt umba @itowandabraxton 😘
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29. You will always be my baby😜. #HappyBirthdayReginae #mybaby18
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30. GC "Gods Child" Red on Red SweatSuit available now at www.MonicaApparel.com ... Take Your Crown wherever you go!! I'm pictured in a Medium... Go to the site now for other options ... cc: @trukernell
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