The economy for the average person overall has been lousy.
Congress may be enacting some other unemployment extensions because things are just so lousy in the economy. Yes, we are in a financial Depression. Here is some information that your pal, Kim Isaac Greenblatt, is providing for those amongst the many that are on unemployment, in terms of how it works and what happens with it at tax time.
The American Recovery and Reinvestment Act of 2009 (ARRA) excludes the first $2,400 of unemployment benefits from tax in 2009. The act also increases the benefit by $25 per week and extends the time to receive the benefits.
When a taxpayer faces a period of unemployment, he is often eligible to receive benefits under a state or federal unemployment insurance program. Unemployment compensation is reported to the taxpayer in Form 1099-G, box 1, a copy of which you should get at the end of the year if you were on unemployment. Unemployment compensation is fully taxable and is entered on Form 1040EZ, line 3; on Form 1040A, line 13; or on Form 1040, line 19. A taxpayer who receives unemployment compensation may request that the payer withhold 10% of the benefits from each check to go toward his federal income tax liability. This may be done by filing Form W-4V with the payer.
If a taxpayer received an overpayment of unemployment compensation during 2008, and repaid all or part of it during 2008, subtract the amount repaid from the amount shown on Form 1099-G and enter the result on the appropriate line on the tax return. In the space to the left of the line, write “Repaid” and the amount repaid.
If the taxpayer repays unemployment benefits received in a previous year, things get a little more complicated. For that situation you will need to do some additional research if you encounter it. Page 88 of IRS Publication 17 contains a discussion of repaying unemployment benefits from a a previous year and you can find that file on the IRS website or order directly a copy from them by snail mail.
Good luck everybody and have a great day. If you need somebody to help you with your taxes, please send me an email or post. I am always looking for new clients.
Oct 15 2009
Kim Isaac Greenblatt
Kim G on Unemployment Benefits
Tags: Business, unemployment
[...] See more here: Kim G on Unemployment Benefits [...]
[...] http://www.kimgreenblatt.com/wordpress/intuition-and-decision-making/trackback/ http://www.kimgreenblatt.com/wordpress/kim-g-on-unemployment-benefits/ http://www.kimgreenblatt.com/wordpress/market-strategies-jul-22-2009-and-create-more-jobs/ [...]