Since unemployment checks do not contain withheld taxes, many people think that they do not owe taxes on them during tax day. There are instances when they don’t.  You could choose to have your unemployment insurance tax withheld. Sometime after January 31, the unemployment office of your state will mail Form 1099-G to you that you have to prepare. This form is for a ‘specific government payment’ and box 1 will list the amount you received. Remember to include the benefits when you file a return.

In general, unemployment insurance includes any amount received under the unemployment insurance laws of your state or the United States. If you are currently receiving unemployment insurance, you could o pt to have the taxes withheld by filing a W-4V request. If you do not do this, you have to make an estimated tax payment every quarter to avoid penalty.

However, since you will still have to pay your taxes come April for unemployment insurance benefits received, it might be a good idea to have the taxes withheld right away. This way, the taxes are taken cared of and you need not scramble when tax day comes and you have no money to pay your dues.

Share and Enjoy:
  • Print
  • Digg
  • Sphinn
  • del.icio.us
  • Facebook
  • Mixx
  • Google Bookmarks
  • Blogplay

Comment now!
















Trackbacks