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Even Unemployed People Have To Answer To Uncle Sam

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By STACIE SCHAIBLE

sschaible@wfla.com

Published: February 27, 2009

With unemployment numbers soaring, people who lost their jobs last year might have a lot of questions about how that will impact their tax return.

Even if you're out of work, you still have to answer to Uncle Sam.

The IRS Web site, www.irs.gov, provides some advice for those out of work tax filers.

The IRS requires anyone who received a W-2 and made at least $8,950 to file a tax return.

If you received severance pay, it's taxable. If you received unemployment, it's taxable.

And if you didn't elect to have taxes withheld from your unemployment checks, brace yourself for a surprise when you file your taxes.

If you took money out of your 401(k) or another retirement plan, it counts as income and it's taxable.

If you're under age 59 and a half, you could also face an additional 10 percent penalty for taking that early withdrawal.

But there is some good news for the unemployed regarding taxes.

Many of the expenses related to searching for a job are tax deductible. That includes creating a resume, hiring a headhunter and transportation to and from job interviews.

But what if you owe taxes but can't afford to pay them?

Contact the IRS as soon as possible to request a payment plan.

News Channel 8 reporter Stacie Schaible can be reached at (813) 225-2739.

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