I originally posted this article on February 23.  I’m posting again as tax season is here.  If you haven’t done yours already, you have less than one month!  Enjoy…

April 15 is coming very soon.  If you were unemployed during 2009 you may be eligible for a number of tax breaks!

Job Hunting Expenses

Job search expenses may be deductible for you for 2009 if:

• You purchased services or products as a part of your job hunt
• You were looking for a job in the same field as the job you left
• You were continuously searching for a job
• You are NOT a recent graduate.

Job search expenses like these may be deductible:

• My services;
• Resume services;
• Mileage driven to and from interviews;
• And phone calls.

For more information, check out this article and contact your CPA.

Severance in North Carolina

If you were terminated involuntarily and received severance pay, it may be deductable at the state level in North Carolina.  Note this article by the NC Department of Revenue.

The website states that up to $35,000 worth of severance is deductible on your NC income tax.  Make sure to check with your CPA to see if this applies to you.  If you’re in another state, check with your state to see if it has similar benefits.

Unemployment Benefits

If you received unemployment benefits in 2009, those benefits ARE taxable.

The First $2,400

Regarding the American Recovery and Reinvestment Act, the IRS website reads:

Normally, unemployment benefits are taxable; however, under the Recovery Act, every person who receives unemployment benefits during 2009 is eligible to exclude the first $2,400 of these benefits when they file their federal tax return.

Make sure to take advantage of this deduction if you and your CPA agree you are eligible.

Married, Both Receiving Unemployment

If you’re married and both spouses received unemployment benefits the IRS site says that you are both eligible for the $2,400 deduction:

For a married couple, if each spouse received unemployment compensation then each is eligible to exclude the first $2,400 of benefits.

Medical Expenses

If your medical expenses in 2009 exceeded 7.5% of your Adjusted Gross Income, you may be able to deduct those expenses.  COBRA payments are included in “medical expenses”, so your COBRA payments may be deductible.  Check with your CPA and reference the articles here, and here, and here.

Didn’t Make Any Money In 2009?

Check with your CPA as to whether you have to file.

One of the reasons for the frustration of Joseph Stack, the man who flew his plane into an IRS building in Austin last week (read more here,) was that he didn’t know he had to file taxes under certain conditions.

Unfortunately, the IRS does not accept the “nobody told me” defense.

Here are the conditions under which you must file a return (from Bankrate.com):

For 2009 tax returns, individuals younger than age 65 must file if they make at least:

• $9,350 as single filers
• $12,000 as head of household filers
• $18,700 as married couples filing jointly and both husband and wife are younger than 65.

If you’re over age 65, started a small business, or a computer programmer there are additional conditions and opportunities.

401(k) Supplements

If you used your 401(k) to supplement your income in 2009, those moneys may be taxable.  Check with your CPA and read this article for more information.

I am not a CPA or tax official.  The information on this page is from a number of resources.  As always, check with your CPA before attempting to make deductions!