Tax Tips for the Unemployed

This week I’ll discuss some tax tips that can help you if you’re unemployed.

First, calculate your taxes before the end of the year.  If you were unemployed for part of the year or held several jobs during the year, the amount of tax withheld may not be enough to cover your entire tax bill.  In October or November you should prepare a preliminary tax estimate to see where you stand.  If it looks as if you might owe additional tax, you can perhaps give to charity or donate more to your retirement account to offset the tax.

 

 

Second, track you medical expenses. If your income drops for the year due to unemployment, you may be able to claim medical expenses.  To claim them, they must equal at least 7.5% of your adjusted gross income.  You should keep all medical bills together so you can easily total them at tax time.

Third, deduct any moving costs you incur. If you have to move due to looking for a new job, many of your moving costs may be deductible, such as storage and transportation of household items and travel expenses.

Fourth, you can seek out free tax filing help.   Many CPA groups offer free tax clinics.  Also the IRS has a program called Free File Tax Service which is available to those whose income is less than $58,000.00.