The Tax Questions Blog

Posts Tagged ‘unemployment compensation’

Question: My husband made less than 2400.00 unemployment compensation do I need to report this when filing?

husband had to take a 2 weeks leave and made about 1000,00 unemployment do i need to report he made any unemployment since the first $2400.00 is non taxable? I already filed should I amend this? and if I have to make corrections anyway should I add this?

Answer: Yes, you have to file it, but the system will take $2400 off automatically

Here Comes A Double Dip Recession...

The following note from Gary Shilling was forwarded by John Mauldin of Thoughts For The Frontline. John includes a short note at the beginning and end. -- Ed.

Question: Is unemployment compensation considered adjusted gross income?

I lost my job in April 2009. In the first 4 months of the year, I earned $7,386.36, of which I had $793 withheld for federal income tax. After that, I earned $10,360.00 in unemployment compensation, which I collected from April to January of 2010. I know that the first $2,400 of unemployment is not taxable, but is the remaining amount, $7,960.00 considered part of my adjusted gross income?

I'm worried I'll have to owe money for the unemployment collected, even though it was barely enough to get by.

Answer: Yes, the remaining amount of your unemployment will be taxable. Your AGI would 15356. However, you will probably still be able to get a refund. I do not know all the details that affect your tax situation. However, if you are single and are not someone else's dependent, then you can take a standard deduction of $5700 and a personal exemption of $3650. Your tax liabilty then turns out to be $598. But, you already had $793 withheld so you would be due a refund of almost $200. Additionally, you would qualify for the special Make work pay credit (like a stimulus) which is $400. So, your federal refund would be $595. Please again be aware that I have had to make assumptions to calculate this refund. Your refund may be different depending on your life situation.

Untaxed unemployment

A disturbing tax surprise for many folks who collect unemployment benefits is that those payments count as taxable income. For 2009 taxes, however, the first $2,400 of such compensation is tax-free.