“Being out of work is stressful enough. Not knowing if you’re getting all the tax breaks you should, or being concerned you’re going to make mistakes that may cost you, just adds to the stress,” said Gary Lundberg a tax software professional with CompleteTax. CompleteTax is an online tax software program offering free federal tax preparation for those who were unemployed during 2010.
He offers these tax tips to help:
Understand what your tax responsibilities are
The unemployed are still responsible for filing a tax return and paying income taxes. This includes taxes on unemployment benefits or severance benefits. According to a nationwide survey conducted by CompleteTax of more than 1,000 taxpayers, many Americans incorrectly believe that being out of work means they’re not required to prepare a tax return or pay taxes.
Get all the tax breaks you deserve
Being out of work allows you to take advantage of several credits and deductions. For example, certain job-search expenses can be deducted if you’re looking for a job in your current profession. These include travel for job interviews, printing and mailing resumés, and outplacement firm fees.
However, the CompleteTax survey found that many taxpayers also incorrectly believe they can deduct haircuts or clothes necessary for job interviews, a home office to use in their job search and classes to learn new skills outside their trade.
Find affordable tax prep and file soon
Those using online tax preparation programs can often prepare and file their tax returns for less than $70. The unemployed can file for considerably less. For example, Lundberg notes, CompleteTax offers free federal tax preparation for those unemployed during 2010: “You want to make sure you know what you can and can’t claim. By using a tax program that includes resources to help you make those decisions, you can be confident you’re completing your taxes accurately and getting the maximum tax refund you deserve.”


