Tax Advice for Unemployment Benefits

F irst off, I am not giving any of this advice as a tax professional.  In fact, I am far from knowing much when it comes to finances.  However, I am a tax paying American who like many of us who have been commenting on this site, jobless.  What little money I do have coming in I don’t need to be sending to Uncle Sam.  After talking with my tax preparer the other day (I don’t file my own taxes) she suggested a few things to look out for as one who is not working and looking for that next job.  Here are those suggestions:

• First, even if you have not worked and are collecting unemployment benefits you need to file income tax returns.  If you don’t report them and you owe taxes the cost could be substantial.  There are a few good things you can claim if your income has dropped substantially. 
• The first $2,400 in unemployment benefits is tax free based on the stimulus bill that exempted those first few unemployment checks.  If your partner is unemployed and your filing jointly the number doubles to $4,800
• With a lower income, you may want to itemize your tax returns and not use the standardized deductions especially if you have a high mortgage, high medical bills, or some other deductions.
• You can write off job hunting expenses such as career coaches, recruiters, job training, resume writing, and driving to and from interviews.  Make sure you have the receipts to back them up.
• If you have someone give you money such as a family or friend to help with your expenses, you don’t have to claim that as income.
• If you made less than $57,000, you can file your taxes electronically for free and get a refund faster.  The IRS website has an area for free tax software to help those lower income families.  
• Finally, make sure you file even if you can’t pay the taxes you owe right now.  The IRS is being flexible because of high unemployment and giving tax payers time to pay on installment plans.

As I have said, I am not a tax professional and the above items were suggested to me from someone who is very intimate with the current tax codes.  This is a hard time of the year for those who are financially strapped.  Having the IRS hovering over our heads doesn’t make the situation any easier.  However, if you spend some time with these items above you might give yourself a chance. 

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Obama Small Business Regulations and Unemployment

I just recently heard that President Barack Obama ordered that there be a government review of business regulations. Those government regulations that might be impeding job growth and continuing high unemployment. The President is looking for any regulations that might stifle growth and place burdens on businesses and therefore job growth.


Obviously, Obama is trying hard to fix the relationships government had with corporate America. He is hoping that by eliminating some roadblocks in regulation that the large corporations will begin to hire again. Quoting the President, he said, "We are also making it our mission to root out regulations that conflict, that are not worth the cost, or that are just plain dumb."


I give the President some props for the effort. This might find a way to relieve the stranglehold federal government has on corporate America. However, this is not the solution that will get us out of high unemployment, eliminate the need for benefits and the possibility of a Tier 5 unemployment benefits package.


Every expert I have read, heard, or witnessed has said the same thing repeatedly. The road to recovery will be spearheaded by small business. The federal government is not the roadblock for small businesses in America. The reason many small businesses are either failing or not growing is due to the local governments that oversee them. Between city, county and state regulations governing what or what not a small business can do, along with the numerous fees each of them require for small business, it is a wonder anyone makes any money as a small business owner.


Long-term recovery must come from the recognition that the majority of the American workers are those involved in small business. Obama who has stated that small business is the backbone of this economy needs to find ways to help them. Corporate relationships with the large corporate American business is fine; however, if the President wants to make a real change he needs to put pressure on local governments to begin making small businesses worth investing in.



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Weather and Unemployment Jobless Extension Benefits

Find Out How the Weather and Unemployment Are Working Against Us

J ust when it seemed that we were out of the woods and that unemployment and jobless extension benefit claims were dropping, we see a sudden surge pop up. Whom do we have to blame for this sudden uptick in unemployment claims this past week? Is it the President, or Congress, or even the economy? Nope. The culprit this time is the weather. Yep, that cold, snowy weather is to blame for the surge in people applying for unemployment benefits.


The huge snowstorms that swept through the Southeast are being blamed for the increase of applications for unemployment benefits. From 51,000 to over 454,000 applications for unemployment were filed last week. That is the highest level in over three months. The reason for the jump is the harsh weather in Alabama, Georgia, South Carolina and North Carolina forced many companies to shut down temporarily. Add to the fact that many government offices were closed due to the heavy snowstorms that many people could not apply for unemployment benefits.


As a Southern California native, having weather affect us in our workdays is foreign to me. I have never been stopped from getting to work by a snowstorm. The occasional flood once in a while, but never for more than a day. This unfortunate spike in unemployment benefits filings could come as a silver lining. This could give the Feds more of a chance to justify buying more bonds to shore up the economy as well as keeping interest rates low for those looking to make big purchases. Let's hope that this was just a blip and that after the holidays and bad weather, we can begin to see better unemployment numbers.

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Time to Find a Solution to Unemployment

Those Unemployed Are Running Out of Time

I n 2010, there were over 20 million Americans who were forced to start collecting unemployment benefits during the year.  That put our jobless rate as a nation at about 10%; here in California it was up over 12% for the year.  I am one of those unfortunate individuals who fell into the job-hunting category.

News reports are telling us that layoffs have slowed down and they are seeing a decline in new unemployment applicants in the last few months.  However, employers are not hiring and though the new unemployment numbers are declining, we are seeing the number of long-term unemployment individuals grow.  Currently more than 5.8 million people have been out of work for six months or longer.  A group than I am unfortunately a part of in my current stalemate of a career.  We are seeing two different trends: first-time jobless claims are falling as layoffs slowdown, but the total number of people collecting unemployment checks is still rising.

We are being told that companies are continuing to be cautious about adding staff until they feel more confident about the economy and if the recovery will be sustainable.  Many are unsure, as we have seen with consumers and business being reluctant to spend to enable that growth.  

Many experts are expecting the unemployment rate to continue at about 9% throughout 2010.  Many are hoping that Congress as well as the Obama administration will have to look at what 2011 has to offer for the unemployed.  They will either have to spend the money to extend benefits, which could cost Americans $70 billion or let those benefits expire and have those long-term unemployed on the streets.

Fewer people are being fired, but nobody is finding a job, seems to be the sentiment that is being told by many unemployed workers looking for their next job.

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Unemployment Benefits Extension Bill Being Proposed

A Return to Work Act

I t seems like at least one state in taking on the issues of unemployment benefit extensions and trying to help small businesses at the same time.  In the great state of Rhode Island, the representatives there are trying to find a way to get their unemployed working again and helping the private business sector as well.  Representative Joseph M. McNamara is submitting legislation to make disincentives for the unemployed to get off of unemployment benefit extensions as well as making a safe transition for businesses to take on the unemployed.

Obviously, this is a time when employers of small businesses are undecided on whether they should take on new employees and new salary costs.  As well as jobless workers who are less than enthusiastic about giving up unemployment benefit extensions for a job that might not last very long or pays less than the unemployment check. 

What Rhode Island Representative McNamara is doing is to introduce legislation called “The Return to Work Act” the he believes will address the issues that both small businesses and unemployed workers have.  The Return to Work Act will allow workers to continue collecting unemployment extension benefits while they are on approve training with a small business employer.  This allows the small business to train new workers for skilled jobs without any upfront training costs to them as well as opening up more job opportunities to those looking for work.

The proposal that Rhode Island is looking to enact is a win-win for all concerned.  The state wins because the unemployed that would be collecting extension benefits anyways will have the opportunity to train for a job and keep them out of other state assistance services later on.  The small businesses win because they get the opportunity to try out and train new employees without a major cost to them. 

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