Unemployment checks do not have taxes withheld so many people think that they will not owe taxes on tax day. There are times when they don’t. You may opt to have your unemployment benefit tax withheld. Sometime after the 31st of January, your state will mail you Form 1099-G that you have to prepare. The form is for ‘certain government payments’ and the box 1 will list how much you received. Do not forget to include the benefits when filing your return.

In review, unemployment benefits in general include any amount that you received under the unemployment compensation laws of the US or your state. If you are presently receiving unemployment benefits compensation, you may choose to have the taxes withheld from government payments by filing a W-4V request. Otherwise, you will have to make an estimated tax payment each quarter to avoid penalty.

Nevertheless, since you still have to pay your taxes on April for your unemployment insurance benefits, it might be better to have the taxes withheld immediately. In this way, the taxes are all taken cared f and you will not be scrambling when April comes and there is no money to pay your income tax dues.

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