Don't Go Broke Doing Your Taxes

I know what you are thinking, I'm unemployed...I don't have to do taxes this year. WRONG!!! Uncle Sam still wants his money, but there are a few things that can help you from ending up owing the government.

1. You can exclude up to $2,400 of unemployment compensation from your 2009 gross income. This break has expired for 2010.

2. You can avoid a "penalty tax" on IRA and 401(k) withdrawals if the withdrawal covers (but doesn't exceed) deductible medical expenses whether or not you actually take an itemized deduction for the expenses. (If you're receiving Trade Readjustment Allowances under the Trade Adjustment Assistance program and similar programs, you may be eligible for an even better deal, the Health Care Tax Credit, which can pay up to 80 percent of your premiums.)
You can avoid the penalty tax on 401(k) and IRA withdrawals by establishing a payment schedule of regular equal withdrawals over your lifetime or the joint lives of you and your beneficiary. There's also no penalty if you take a distribution when you separate from service at age 55 or older.

3. If you itemize, you can deduct job-hunting expenses as a "miscellaneous itemized deduction," to the extent that all your miscellaneous itemized deductions exceed 2 percent of your adjusted gross income. Job-hunting expenses can include: resume printing costs; postage; long-distance calls and faxes; travel expenses, including air, taxi and rail as well as mileage and tolls; and lodging expenses for out-of-town interviews.

4. If you find a new job and move, you may be able to deduct moving expenses. To qualify, the new job must be at least 50 miles further from your old home than your old job was from your old home. This is an "above the line" deduction, available whether you itemize or not.

5. IF you have access to a computer (clearly you do if you are reading this blog), do your taxes yourself at home. I did mine online using turbotax and it was simple and easy.

http://www.CCHGroup.com