Millions of Americans are currently unemployed, many of them due to the economic crisis caused by the US pandemic. Covid-19, However, many others were already in this situation before it hit with all the spread of this virus.
Today several of those millions are receiving unemployment benefitsBut they could get a big tax surprise when filing their taxes for 2021.
The reason is that, surely as you have read in other articles published in Solo Dinero, unemployment benefits, including the extra money that has been distributed by federal aid programs,
This is because unemployment benefits, including extra money distributed through federal aid programs, count as taxable income. taxes.
The surprise is that, according to a survey by Jackson Hewitt Tax Service, 38% of Americans who receive these benefits are unaware that these amounts are taxable. But still, almost two-thirds of these people had not set aside money to pay their 2020 income taxes.
“A large number of people who receive unemployment benefits are unaware that benefits are taxable, that taxes are not automatically withheld, or that unemployment pay may affect other tax credits,” said Mark Steber, director of tax information for Jackson Hewitte, in an interview he gave to Fox Business.
Only the states of California, New Jersey, Oregon, Pennsylvania and Virginia completely exempt the tax from unemployment benefits, in all other localities in the country, they are required to pay their share of federal taxes.
So if you didn’t factor in paying taxes, be prepared to receive an invoice for it on your next return, which is a few weeks away from starting.
What are the options you have?
According to experts at Fox Business, there are two ways to handle this situation.
The first one has to do with withholding taxes. When you first receive unemployment benefits, you will be given a 1099-G form from the Internal Revenue Service.
At that time you can choose to have your compensation taxes withheld from that moment, but if you are already receiving the payment and you want the tax obligation to be automatically eliminated before receiving the payment, you must submit Form W-4V .
The second option is that if you don’t want the government to withhold your taxes, you can choose to make the payments every quarter. Then you must calculate your contribution and make the respective payments in that time.
With the help provided by the Cares Act, additional benefits of $ 600 per week were awarded to each qualifying person through the end of July.
According to a Fox Business investigation, each employee who was laid off received about $ 930 a week in benefits before the help they were accessing at the time expired. Following this, current President Donald Trump approved the partial supplement of $ 300 per week.
In addition to this, this week the US Congress approved an aid package for all the havoc that the coronavirus continues to cause, and within the measures that were taken into account, a green light was given to an extension of aid for unemployment that will be $ 300 dollars a week that beneficiaries can receive until mid-March 2021.
A week after the end of 2020, these benefits are expected to start giving you from the first days of January, as long as Trump signs the bill, a few days after he leaves the presidency of the United States in a definitive.
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