It’s no secret that this year has been tough for everyone. Many people have seen significant changes in their finances through all of this. Whenever you go through major financial changes like suddenly becoming unemployed or getting furloughed, it can leave you with significant changes to your taxes as well. If you aren’t well versed in the tax world, it can be difficult to know where you stand and what it all means. Mark Dicus & Company is here to share some tax tips for those that have gone through these big changes in the past year.
Do You Still File Taxes if You are Unemployed or on Furlough?
When you aren’t employed for one reason or another, it can be easy to forget that you need to be filing a tax return. It is important that you remember you still need to file your taxes so that you don’t get pegged with late fees. Not only will they penalize you, but you will also have to pay interest on that penalty as well.
File Tax Return Early
While taxes are usually not something anyone is excited to do, you could find that with your current financial status, you may get a refund back. When you are unemployed or furloughed every little bit of money usually helps significantly. For this reason, get them filed as soon as you can.
Take Full Advantage of Government Benefits
Often, when your financial situation changes so drastically, you become eligible for government benefits that you wouldn’t have been eligible for before. While it can be difficult to accept help sometimes, you may find that the benefits outweigh the cons to taking advantage of these benefits.
– Food Assistance
– Low-Cost Auto Insurance
– Unclaimed Funds
– Health Insurance
– Low-Cost Utilities
Is There a Tax Break on Unemployment?
There are certainly some tax breaks that you can benefit from when you lose your job or are furloughed. Depending on the amount of money you made, you can possibly benefit from some of the following tax breaks:
– Earned Income Tax Credit
– Child Tax Credit
– Child & Dependent Tax Credit
– Retirement Savings Credit
Is a Severance Package Considered Earned Income?
When you are laid off from your job or let go, you may have gotten a severance package that came along with it. You need to remember that all the income that came from that is taxable, and it will show up on your W-2 Form. Your unemployment income is also money that is taxable.
Tax Preparation, Filing, Planning & More in Salt Lake City, St. George, West Valley City, Provo, Orem, West Jordan & Greater Cedar City, Utah
If you have seen big changes to your income over the past year, know that you aren’t alone. Millions of Americans are in the same boat you are. If you have questions about what this means for your taxes, there is no one more qualified to answer those questions than the professionals at Mark Dicus & Company. We will make sure you are taking full advantage of all the tax breaks that are now available to you. Call us today!