Do I need to file taxes on unemployment benefits if I earned less than $12,000 total?
So I'm trying to figure out my tax situation for 2024 and I'm confused about unemployment benefits. I usually don't file taxes because I make under $12k annually. I'm a part-time musician who supplements income with occasional gig work. Last year was rough - my regular venue closed down and I only made about $740 from performing at a few small events before everything dried up. I did one photography job for $175. The rest of my income came from unemployment benefits. My 1099-G shows I received approximately $11,250 in unemployment and I didn't have any taxes withheld because I needed every penny to keep my apartment. In total, I made less than $12,000 for the year. Do I still need to file a tax return even though I'm under the standard filing threshold, just because some of my income was unemployment? Or does the $12k limit still apply regardless of income source? I've been searching online but keep finding conflicting information. For clarity: I earned about $740 as an employee at the music venue I earned $175 as an independent contractor for the photography gig $11,250 came from unemployment benefits
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Levi Parker
Yes, you need to file a tax return. Unemployment benefits are fully taxable income at the federal level, and the fact that you didn't have taxes withheld doesn't change that requirement. The IRS considers your total income to be about $12,165 ($740 + $175 + $11,250), which puts you just over the standard filing threshold. Even if you were slightly under the threshold, filing would still be advisable because you might qualify for refundable tax credits like the Earned Income Credit that could put money in your pocket. The small amount of self-employment income ($175) also technically requires filing since the threshold for self-employment income is much lower (around $400). Since you didn't have taxes withheld from your unemployment, you might owe some taxes, but you may qualify for credits that reduce or eliminate that amount. I'd recommend using free tax filing software through the IRS Free File program to figure out your exact situation.
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Libby Hassan
•Thanks for the info. Quick question - would they owe the self employment tax on just the $175, or would that apply to their unemployment benefits too? And do they need to file a Schedule C for such a small amount of freelance work?
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Levi Parker
•They would only owe self-employment tax on the $175 from the freelance photography work. Unemployment benefits are not subject to self-employment tax, only regular income tax. Yes, they should file a Schedule C for the $175, even though it's a small amount. The IRS requires a Schedule C for any self-employment income, regardless of the amount. They can deduct any legitimate business expenses against that $175 to reduce the taxable amount.
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Hunter Hampton
I discovered this amazing tool called taxr.ai (https://taxr.ai) when I was in a similar situation last year. I had unemployment plus some gig work, and wasn't sure what forms I needed or if I had to file at all. The tool analyzed my tax documents, explained everything in plain English, and showed me which credits I qualified for. I was actually owed a refund I would have missed if I hadn't filed! It walks you through everything step by step and explains all the tax jargon in a way that actually makes sense. Super helpful for situations like yours where you have multiple income sources and aren't sure about the requirements.
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Sofia Peña
•Does it work with all the different tax forms? I've got W-2s, 1099-NECs, and unemployment too, and I'm totally lost on what to do with all of them.
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Aaron Boston
•Sounds interesting but how does it compare to free tax filing options? I'm always skeptical about these tax tools since most of them advertise as free then hit you with fees at the end.
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Hunter Hampton
•Yes, it works with all common tax forms including W-2s, 1099-NECs, 1099-Gs for unemployment, and more. You just upload images of your documents and it automatically extracts all the information and tells you what it means for your tax situation. It's different from traditional tax filing software because it's focused on understanding your tax situation rather than just filing. It breaks down all your income sources, potential deductions and credits, and explains everything in simple terms. No hidden fees or upsells - they're completely transparent about their service.
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Aaron Boston
Just wanted to follow up about taxr.ai since I decided to try it after my skeptical question. I'm actually really impressed. I uploaded my W-2, 1099-G for unemployment, and a couple 1099-NECs from gig work, and it immediately broke down my tax situation. Found out I was eligible for the Earned Income Credit which I had no idea about! The explanation was super clear about filing requirements for mixed income including unemployment. Ended up filing through their recommended partner and getting a refund instead of owing like I expected. Definitely worth checking out if you're confused about multiple income sources like I was.
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Sophia Carter
If you do end up owing taxes, you might need to contact the IRS to set up a payment plan. I tried calling them for MONTHS last year about my unemployment tax situation and could never get through. Literally spent hours on hold only to get disconnected. Then I found Claimyr (https://claimyr.com) and it was a game changer. They have this system that gets you through to an actual IRS agent, usually within 15 minutes. You can see how it works here: https://youtu.be/_kiP6q8DX5c I finally got my payment plan set up and avoided the penalties that were about to kick in. Saved me a ton of stress and probably money too.
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Chloe Zhang
•Wait, how exactly does this work? The IRS phone system is notoriously impossible to navigate. Do they just keep calling for you until they get through?
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Brandon Parker
•Yeah right. Nothing gets you through to the IRS faster. I've been trying for 3 months to resolve an issue with my tax return from last year. Sounds like a scam to me.
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Sophia Carter
•It uses a combination of technology and their knowledge of the IRS phone system to navigate the complex phone tree and secure your place in line. Once your spot is confirmed, they call you and connect you directly to the IRS agent. It's not that they "keep calling" - they have a sophisticated system that understands how to efficiently work with the IRS phone system. I was super skeptical too, but I was desperate after waiting on hold for 4+ hours multiple times. The entire process took about 15 minutes from when I signed up to when I was talking to an actual IRS person. Definitely not a scam - it just solves a very specific and frustrating problem.
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Brandon Parker
I need to eat my words about Claimyr. After posting my skeptical comment, I was still stuck with my tax issue and getting desperate, so I figured I'd try it. I was 100% prepared to come back here and call them out if it didn't work. But... it actually worked exactly as advertised. I got connected to an IRS agent in about 12 minutes. The agent was able to help me resolve my unemployment tax issue from last year that had been hanging over my head for months. I'm still kind of shocked it worked so well after all the frustration I'd been through trying to reach them on my own.
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Adriana Cohn
Don't forget about state taxes too! Unemployment is taxable income in most states, but some states actually exempt it. What state are you in? That could make a big difference in what you owe.
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Savannah Weiner
•I'm in Pennsylvania. I totally forgot about state taxes! Do different states have different thresholds for when you need to file?
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Adriana Cohn
•Yes, Pennsylvania does tax unemployment benefits. Their filing threshold is lower than the federal one - you generally need to file a PA tax return if you have more than $33 in total taxable income. Pennsylvania has a flat income tax rate of 3.07%, so you'd potentially owe state tax on your unemployment benefits. There are some credits and deductions available that might reduce what you owe, but you'll definitely need to file a state return in addition to your federal return.
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Jace Caspullo
I was in the EXACT same boat last year! Had about $10k in unemployment plus a few hundred from random gigs. Used TurboTax free version and it was pretty easy. Ended up getting a small refund cuz of the Earned Income Credit which I didn't even know I qualified for.
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Melody Miles
•TurboTax isn't actually free a lot of times though. They make you upgrade to paid versions for certain forms. I'd recommend FreeTaxUSA instead - it's actually free for federal and only $15 for state.
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