The article has been automatically translated into English by Google Translate from Russian and has not been edited.
Переклад цього матеріалу українською мовою з російської було автоматично здійснено сервісом Google Translate, без подальшого редагування тексту.
Bu məqalə Google Translate servisi vasitəsi ilə avtomatik olaraq rus dilindən azərbaycan dilinə tərcümə olunmuşdur. Bundan sonra mətn redaktə edilməmişdir.

Some taxpayers are in for a nasty surprise in 2021

The coronavirus pandemic has triggered a massive unemployment crisis in the United States. Although the unemployment rate has declined since hitting a record high in April, millions of Americans are still out of work and rely on benefits to pay their bills. But it is these workers who can face a very unpleasant surprise when they begin filing taxes for 2020 next year. Fox Business.

Photo: Shutterstock

If you received unemployment benefits, you may not realize that this income, like your regular salary, does not belong to you entirely. Although unemployment benefits are not subject to payroll taxes, which are used to fund Social Security, you must pay federal taxes on that income.

Typically, you will be given the option to withhold 10% of your weekly benefit for this purpose before you start receiving this money. Otherwise, you may receive the full benefit and then make the estimated quarterly tax payments to the IRS.

But you cannot sit back and assume that you will not face the benefit tax liability, because that is simply not realistic. And, unfortunately, many people are not aware of this. In a recent survey, 38% of respondents said they were unaware that unemployment benefits were taxable. Moreover, 61% of respondents did not withhold or save money from their unemployment salary to pay their 2020 income tax.

On the subject: IRS to Launch Tax PIN Codes for All Taxpayers

Result? Many people may face a serious tax bill in April when the 2020 tax deadline is due. As Mark Steber, director of tax information at Jackson Hewitt Tax Service, explains:

“There is a real likelihood of a tax-filing shock this season. A large number of people receiving unemployment benefits are unaware that benefits are taxable, that taxes are not automatically withheld, or that unemployment benefits may affect other tax benefits. This group, especially those accustomed to receiving refunds, may be shocked to see that they really have to pay taxes on April 15th. This may be due to the fact that the tax at the source of payment is not withheld. ”

Be proactive

If you are receiving unemployment benefits and do not want to deal with tax difficulties in the future, try to withhold some of this income for federal tax purposes - even if you did not do so initially. Some states will allow you to change your tax lien as soon as you start receiving benefits.

And if you've been receiving benefits for most of the year and haven't paid a dime in taxes on that money, schedule an estimated quarterly payment to the IRS by January 15th. If you leave this tax debt thinking that you will simply pay it off when you file your 2020 return in April 2021, you risk accumulating interest and penalties on that unpaid amount.

You may be interested in: top New York news, stories of our immigrants and helpful tips about life in the Big Apple - read it all on ForumDaily New York.

Remember that the US tax system operates on a pay-as-you-go basis. The IRS wants to get its share of your unemployment benefits. The better you prepare now, the less likely you will be overwhelmed when April hits.

Read also on ForumDaily:

On diapers, sweets and the Internet: the strangest taxes in the US

What annoys and delights our immigrants in the US

In California, two churches have called themselves strip clubs to remain quarantined

IRS to Launch Tax PIN Codes for All Taxpayers

Miscellaneous In the U.S. dole taxes in the USA Special Projects

Do you want more important and interesting news about life in the USA and immigration to America? Subscribe to our page in Facebook. Choose the "Display Priority" option and read us first. Also, don't forget to subscribe to our РєР ° РЅР ° Р »РІ Telegram - there are many interesting things. And join thousands of readers ForumDaily Woman и ForumDaily New York - there you will find a lot of interesting and positive information. 

1062 requests in 2,240 seconds.