Note: While the following is vital information as you prepare your 2009 federal income taxes, you should seek independent tax advice to be fully informed while making your tax decisions.

If you have been unemployed for some time now due to the difficult economy, you may very well be considering filing for bankruptcy protection.

 If you have received unemployment benefits in 2009, you may be entitled to a special tax break when filing; this is part of the American Recovery and Reinvestment Act. Five important facts from the IRS regarding your unemployment benefits as they relate to your federal income tax:

1.    Unemployment compensation includes any monies received under the unemployment compensation laws of the U.S. or a state. It includes state unemployment insurance benefits, railroad unemployment compensation benefits and benefits paid by a state or Washington D.C. from the Federal Unemployment Trust Fund. It does not include worker’s compensation.

2.    Unemployment benefits are usually taxable; however, under the Recovery Act, if you have received unemployment benefits during 2009, you are allowed to exclude the initial $2,400 when filing your federal return.

3.    For a married couple, if both spouses received unemployment compensation, you may each exclude the first $2,400 of benefits.

4.    You should receive Form 1099-G, Certain Government payments, which show total unemployment benefits paid in 2009, in box 1.

5.    You will need to subtract $2,400 from the amount to figure how much of your unemployment compensation is taxable and, therefore, must be reported.

(source: The Miami Herald)

 If you have been contemplating bankruptcy, please contact the lawyers at Jacoby Meyers Bankruptcy Law. We are knowledgeable and experienced in the field of Chapter 7 and Chapter 13 personal bankruptcies. We listen to you and suggest the economic plan that will be the best way to get out of your present financial difficulties and get a fresh financial start. Call toll-free 800-260-1402 today for your initial free consultation or log onto www.jacobymeyersbankruptcy.com. With nearly 100 offices across the country, you can call click or come in—we can help.