Tax Consequences of Losing Your Job
Tax Consequences of Losing Your Job
Given the current economic conditions, you may find yourself faced with tax questions surrounding a job loss and unemployment issues.
Here are some answers:
Q: What about unemployment compensation?
A: Unemployment compensation you receive under the unemployment compensation laws of the United States or of a state must be included in your income. It is taxable income. If you received unemployment compensation, you should receive Form 1099-G showing the amount you were paid and any federal income tax you have withheld.
Note: The American Recovery and Reinvestment Act will temporarily change the taxation of unemployment benefits for the 2009 tax year only. Under the new economic stimulus law, the first $2,400 of unemployment benefits received in 2009 will not be subject to federal taxes. The exemption will be reflected on tax returns filed in 2010.
Q: What about losing my job?
A: The loss of a job can create new tax issues. Unemployment compensation and Severance pay are taxable. Payments for any accumulated vacation or sick time also are taxable. You should ensure that enough taxes are withheld from these payments or make estimated tax payments to avoid a big bill at tax time. Public assistance and food stamps are not taxable.
Q: Are job search expenses deductible?
A: You may be able to deduct certain expenses you incur while searching for a new job, even if you do not get a new job. Expenses may include travel, resume and outplacement agency fees. Moving costs for a new job at least 50 miles away from your home can also be deductible.
Q: What if my employer goes out of business or into bankruptcy?
A: Your employer must provide you with a 2009 W-2 Form showing your wages and withholdings by February 1, 2010. You should keep current records or pay stubs until you receive your Form W-2. If your employer fails to provide you with a Form W-2, contact the IRS and we can help by providing you with a substitute Form W-2. If your employer is liquidating your 401(k) plan, you have 60 days to roll it over to another qualified retirement plan or IRA. The Right Tools For The Job The Right Tools for the Job: Pruners Conservatories : Choosing A Builder For The Job Importance of MBA for a better job Benefits of Job Board Services for Prospective Employees and Employers How Do Job Board Services Help Employers and the Prospective Employees? How employer's liability insurance can keep employees secured at workplace Working Conditions for Call Center Employees Job Openings In My Area, Danny Demichele Photos express the value of passion for job Find A Good Job Reasons To Uncover The Right Luggage Items For The Right Job Jobs in HR - How to Be an Effective Human Resource Employee