Atlanta Bankruptcy Attorneys Suggest Emergency Savings Funds For Unexpected Taxes
Think Uncle Sam will take care of you if you lose your job? You're right - for awhile.
The first $2,400 you receive in unemployment benefits are free for you to keep, according to Atlanta bankruptcy attorneys. Make that $4,800 if you file taxes jointly as a married couple. But after that, you're responsible for paying taxes on benefits just as you would on a regular paycheck. Wondering how much you might owe? You should be receiving a Form 1099-G, which you'll report on your tax return.
Paying taxes even when you've been out of work sounds like a crap deal. But fortunately there are some ways to lessen the blow.
You might be able to write off the cost of job searching, for example. Did you pay to print out and mail resumes or portfolios? Did you sign up for a job search site or at a job agency? Did you buy gas to travel to interviews? So long as those costs add up to at least 2 percent of your gross income, you can deduct them. Time to start saving those receipts.
Of course, you can only deduct so much. Your best shot at making your tax bill affordable is to be prepared. There's no getting around paying it, so you might as well have enough cash available beforehand, so you're not scrambling at the last minute. And this doesn't just apply to taxes, or to periods of unemployment. Everyone can benefit from a cash cushion, whether they use it for unexpected medical bills, car repairs, pay cuts, you name it. And not only will it make hard times more affordable, but it will also make them less stressful.
Don't have an emergency fund? Enough with the excuses. Whether you can save 10 percent of your paycheck or just under one percent, what's important is that you're saving something. Anything that goes into your saving account is money you won't have to put on your credit card in an emergency, meaning you'll be saving money on interest - and keeping your debt in check.
Problem is, sometimes your debt is out-of-control to start - and that gets in the way of your saving. If credit cards and other bills are leaving no room for saving, no matter what budget cuts you make, bankruptcy might be able to help. Chapter 7 bankruptcy can often help folks with little to no income discharge unsecured debts like credit card or medical bills in just a few months - though it's not your only bankruptcy option. To find out whether bankruptcy is your best bet, sign up for a free personal debt analysis with an Atlanta bankruptcy attorney. Lowering or eliminating debt can permanently free up more money - so you can get by no matter how big your tax bill is.