Unemployment and Taxes: Do You Know What's Deductable?
The good news: if you were unemployed during 2010 you're probably eligible for additonal tax breaks and deductions when you file your taxes in April. The bad news: if you're like most people you have no idea what those tax breaks and deductions are, and could miss out on deductions or make mistakses, if you don't seek help.
According to a recent survey by CompleteTax, the majority of people know about some of the rules and regulations regarding deductions, but only 1 percent of respondents could answer six simple statements correctly regarding what can and can't be deducted in relation to unemployment. For example less than half of people surveyed knew that expenses related to printing and mailing resumes can be deducted, but classes to learn new skills outside their trade cannot.
And almost half of taxpayers incorrectly believed that being unemployed allows them to delay paying taxes or exempts them from filing a return at all (neither is true). Another area of concern raised by the CompleteTax Tax Breaks for the Unemployed Survey, is confusion regarding the taxability of unemployment and severance benefits (both can be taxed) and the deductibility of health care expenses (being unemployed doesn't automatically entitle you to deduct health care costs).
Clearly educating yourself or seeking professional help with your taxes this year is essential if you've been unemployed. As if being without a job isn't stressful enough, you hardly need the IRS breathing down your neck with a whopper of a tax bill because of a simple misunderstanding.
CompleteTax wants to make sure anyone who's unemployed has access to the tools and support they need to file a proper return, and get the biggest refund possible, so they're offering free premium-level federal online tax preparation for 2010 to anyone who was unemployed for any part of last year. See the CompleteTax survey findings, including questions asked and correct answers.
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