Unemployment rates in the US recently dipped to a four-year low. In spite of this good news for the economy, there are still many people who are out of work right now. If you are one of them, or were unemployed for part of the year last year, you need to know how this will affect your IRS tax return.
For one thing, don’t assume that just because you weren’t employed, you don’t owe taxes. If you received any unemployment benefits, disability benefits, or other assistance, they will count as income. If you didn’t submit a withholding request for your benefits, you may even owe the IRS money.
Some people find that they have to withdraw funds from their IRA accounts early, in order to pay their bills while they are unemployed. Normally, there is a tax penalty for early withdrawals on retirement accounts. However, you may be able to claim that your withdrawal is a hardship distribution, and not have to pay that penalty.
When you have a tricky tax situation like this, you want professional tax help. Levy and Associates can help you with tax preparation, as well as tax relief if you are already dealing with the IRS. Let us help to make sure that you get all of the deductions and credits you are entitled to.