Unemployment Compensation & Economic Recovery Payments

New in estimated taxes for 2009: certain unemployment compensation can be excluded from income.

According to the IRS,

You can exclude from income the first $2,400 of unemployment compensation you receive.

Also, if you receive any of the following benefits:

• social security
• supplemental social security
• railroad retirement benefits
• veterans disability compensation or pension benefits

Then you will receive an economic recovery payment of $250. (This is not included in your income.)

The above are just two of the almost 30 scenarios in which the IRS has released new rules for estimated taxes in 2009. I invite you to check back here every day over the coming weeks as we explain each and every change.

As always, I look forward to your feedback.