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Unemployment Is Taxable

February 9, 2011

Nearly 40% of adults don’t realize that unemployment benefits are taxable, according to a survey by Complete Tax, a tax software provider. Nearly a quarter believe that unemployed people don’t have to file an income tax return, according to the survey. The economic stimulus package enacted in 2009 exempted the first $2,400 of unemployment benefits from gross income. That exclusion wasn’t extended into 2010, so if you collected benefits last year, all of them are taxable. If most of your 2010 income came from unemployment benefits, your income was probably too low to trigger a tax bill. But many taxpayers who received unemployment benefits in 2010 worked for part of the year, or have other sources of income, such as wages from a spouse’s job. In either of those cases, there’s a good chance you’ll owe taxes on your benefits. That means it is particularly important to take advantage of deductions that could lower your tax bill.

  • Job Hunting Costs
  • Moving Costs
  • Health Care

I’m always concerned that the public is unaware and uninformed about so many of the basic tax laws that are necessary to live our life. I always tell the story of when I turned 18 I needed to go down to the local post office and register for the draft; which I easily did without reservation. And I always thought it was odd that when I needed to file my first tax return or had to get a checking account I didn’t know what to do or how to go about finding a resource. High School did not teach life skills and my parents were of little help. But all over the school were signs about signing up for the draft or else!

So fast forward to 2011. At Gunwel Tax & Bookkeeping we want to help you with all of your tax needs. We want to be that resource for you to help clear up any of these myths or just to answer your questions. We don’t charge for phone calls or emails so call at 212-979-6830 with any questions you may have. You work hard for your money, let GAI work smart to help you keep it. Stop by and see us. See you soon!

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