For 2011 Federal tax return for unemployed, there are a lot tax rebates that are available to lower tax liability.
Here are 3 of the important ones available, so as to help you getting a good value of tax refund from the 2011 Federal taxes:
1. COBRA insurance – It allows unemployed individuals and their families to receive health insurance for up to 18 months after employment is terminated. Before the act, individuals had to pay the full premium, which was generally pretty expensive. With the new act, individuals are only responsible for 35 percent of the premium in 2011 for up to nine months, and the employer is responsible for the other 65 percent.
The employer is then entitled to a payroll income tax credit for that 65 percent. That reduces the tax liability for 2011 Federal income return.
2. Retirement account distributions – Support for many unemployed taxpayers in 2011 is their retirement account. Many of these plans are subject to a 10% penalty on early withdrawals, as well as the distribution being taxable when received. However there are some exceptions, one of them is -
2011 IRA Federal income that are used to pay qualified higher education expenses of the taxpayer, the spouse, or any child or grandchild of the taxpayer or the taxpayer’s spouse.
3. 2011 Job Hunting Expenses – Several Job-hunting expenses like Employment agency fees, job counseling and referral services,classified ads,travel for interviews,costs of resumes,telephone/Internet costs are deductible to the extent they exceed 2% of adjusted gross 2011 Federal income.
These are top 3 tax breaks that should be utilized when filing 2011 Federal Tax return for unemployed.
