One of the latest employment reports in 2022 came from the US Bureau of Labor Statistics and he confirmed that the unemployment rate was 3.7% in early November. A large scale of layoffs were announced and executed in the last quarter of 2022, including large companies such as Meta, Twitter and Apple. This rate is only expected to increase over the next few months, especially with the way inflation has affected every American citizen and business.
Anyone who has been through a layoff in the past or recently will know that this feeling can be quite overwhelming and make you feel uncomfortable at any time. But none of these people have to go through this terrible time alone, there are ways to help the unemployed through TurboTax. There is a way to at least avoid paying taxes while you are unemployed and we are going to tell you all about it. We’ll tell you all the steps you need to take after you’ve been fired. The proper steps to file for unemployment, how it’s taxed, and other money-saving tips.
How to file an unemployment claim
First and most importantly, you need to verify all accounts such as 401(k) retirement accounts and make a decision. You can transfer your investments to another retirement account. There is a 60-day period to perform a direct rollover right after being terminated and avoid taxes on transferred funds. You can also follow up to see if your previous employer added any severance pay for you, vacation, or sick pay that you may be entitled to. If you are eligible for unemployment, apply only after checking all these boxes.
W-2 workers who file for unemployment through no fault of their own are generally eligible to apply. You must gather documents related to your previous employment, such as the period worked, the date of your last day of work, the reason why you are no longer working there, and your gross earnings. Each state has a different type of eligibility requirements. Unemployment income is also taxable and must be included in your income for the year. When you file your taxes, you will receive Form 1099-G which will tell you how much unemployment income you received.