Due to becoming unemployed, during tax
year 2009 my wife withdrew about $40,000 from our IRA's. We did not have any taxes witheld. I also collected about $18,000 of unemployment benefits
and did not have any taxes witheld.
Here's why: My employment was terminated in violation of state
and federal law
. After wrongfully terminating my employment, my former employer made misleading statements to unemployment officials, who in turn denied my unemployment. I hired an attorney ($$$) and appealed this decision. I won. However, my family was without any source of income
for six months. Good news/bad news -- the decision has enabled me to file additional legal claims for damages (even more $$$ for legal representation.
How do I file?
During this time, my wife fell and broke her wrist, which required surgery. I was not extended COBRA benefits, but fortunately we had purchased catastrophic health insurance coverage. This insurance covered most of the claim, but we had to pay the first $7,500.