The Internal Revenue Service, or IRS, has the Volunteer Income Tax Assistance program that can give unemployed people free help with their taxes, and its options include getting taxes prepared in person or getting guided assistance with online tax preparation software. The IRS website has options to find sites that offer the service locally, and some of these locations include schools, libraries, shopping malls and community centers.
People who are unemployed receive some tax benefits, notes Intuit. For example, they can deduct their job search expenses, avoid paying taxes on state benefits and receive some tax breaks if they qualify for the Earned Income Tax Credit or Child Tax Credit. However, the unemployed still need to pay taxes on the funds received for unemployment compensation and unused vacation time from work.