(PRWEB) November 8, 2002
(Raleigh, NC) Â November 6, 2002 Â Are you are one of the thousands who lost their job during this economic downturn or are you feeling the threat of being laid off and are wondering how to plan for it? YouÂre not alone. And you do have options.
The National Association of Enrolled Agents (NAEA) advises that one of the first things you should do if laid off is to assemble the necessary paperwork for tax filing season. You know the drill. Make sure you have all W-2s, 1099s and 1098s; paperwork for education credits, purchases, refinances and sales of stock; and payments of estimated taxes and mileage.
With your tax papers in order, you should then consider the financial options available to you. Although you may have money invested in a variety of places, itÂs vital to know which savings you can access without incurring penalties that will chip away at the amount you have saved.
ÂGenerally, any distribution from your IRA or qualified retirement plan that you receive before age 59 Â½ is considered an early distribution,Â explains Sherrie A. King, EA and a member of the North Carolina Association of Enrolled Agents. ÂThose early distributions are subject to a Federal 10% early withdrawal penalty in addition to any Federal and State income taxes due. There is an exemption for unemployment benefits on your North Carolina return, so itÂs best to use that income before drawing from your retirement savings.Â Other tax-planning tips King recommends for the unemployed are:
Unemployment benefits are not tax-free. When registering for unemployment benefits, it is smart to have income taxes taken out of each check to avoid a higher tax bill later on.
Expenses incurred in finding a job in your current line of work may be deductible. Save receipts related to your job search. Travel, lodging, transportation, and up to 50% of your meal expenses during a job search trip may be tax deductible, as are the costs of phone calls, advertisements, printing and mailing of resumes, and fees to employment agencies and career counseling centers.
Special note: King Tax & Accounting has moved into their new location just in time for the tax season! You can find them at 208 W. Millbrook Road at the corner of Six Forks and Millbrook in Raleigh. The new phone number is 919-676-2114.
About Enrolled Agents
Enrolled Agents, or EAs, are Federally authorized tax practitioners who have technical expertise in the field of taxation and are empowered to represent taxpayers before all administrative levels of the IRS for audits, collections, and appeals.
About King Tax & Accounting
King Tax & Accounting is operated by Sherrie A. King, an Enrolled Agent. The practice represents clients in all types of businesses, as well as individuals, in the areas of taxation and accounting. They provide tax preparation, tax advice, and tax planning services in addition to helping taxpayers resolve problems with the IRS. For more information, contact (919) 676-2114 or http://www.KingTaxAccounting.com.
King Tax & Accounting is a member of GMG Alliance Â a strategic alliance with Development Strategies (http://www.RequestDS.com) that offers expert professional services in business strategy, tax accounting, and human resources.