If you’re jobless you may qualify for government programs and tax benefits Here are a few tax tips UniAmerica Insurance would like to share with you to help you through the hard times.
1. Sign up for public benefits, which can be tax-free
Each year, governmental agencies at the federal, state, and local levels provide $1.8 trillion in benefits to help people through an economic setback. These benefits can include:
- Food aid programs
- Home energy assistance
- Inexpensive phone service
- Health care coverage
- Low-cost car insurance
2. Find out if you have a tax refund by filing early
Because you have been unemployed, you probably won’t reach the income level you expected when you set your income tax withholding at your former job. As a result, you might end the year in a lower tax bracket, and some of the money you withheld to cover your taxes may end up being returned to you in the form of a tax refund.
3. Add your unemployment compensation to your taxable income
You must still report unemployment compensation and your state should provide you with a Form 1099-G early in the year. This form will tell you how much unemployment compensation you received and if any taxes were withheld. Report the amount on this form along with all other income you earned on your tax return.
4. Find out how self-employment taxes work
If you became unemployed unexpectedly, you may have turned to side gigs to fill the income gap. If so, that usually means you were self-employed—a situation with its own tax rules. The most important ones include:
- Reporting your income and business expenses on Schedule C (Profit or Loss from Business) or Schedule F (Profit or Loss from Farm Income).
- Attaching Form SE (Self-Employment Tax) to your 1040 and paying Social Security and Medicare taxes on the income you received from your self-employment income.
5. Double-check your tax credits
You may be eligible for tax credits you may not have claimed before, including:
- Earned Income Tax Credit. Depending on your income and the number of children you have, you may be eligible for an Earned Income Tax Credit of up to $6,557. This credit can actually be refunded to you even if you do not owe any tax.
- Child Tax Credit. If you have a qualifying child under the age of 17, you may be eligible for a credit of up to $2,000 for each child.
- Child and Dependent Care Credit. Even if you are not working, you may be able to deduct the cost of child care while you are looking for work, depending on your income level.
- Savers Credit. Depending on your earned income, you might be able to receive a credit of up to $1,000 ($2,000 for couples) for contributions you make to a qualified retirement plan. To be eligible for this credit in 2019, your income can’t exceed $32,000 if you are single. And if you are married, $64,000.
Let Uniamericainc.com help you with income taxes today!