TEXAS (KVEO) — Tax season is just around the corner and for those that received unemployment benefits, you could be in for a big surprise. Those checks are taxable, so how much could you owe?
Unemployment benefits are taxable income and if you did not ask them to withhold money from each check, then you’ll owe about 10 percent when you file.
“For an individual that maybe received $25,000 in unemployment benefits, what do those taxes looked like based on those benefits, I’m going to say a minimum of $2,500,” says Garcia.
Garcia says when you’re signing up for benefits, it’s easy to overlook the Federal withholdings question, or some may not understand. While others may want the whole amount, and will say i’ll deal with it later.
If you can’t pay all at once Garcia says, the IRS has flexible installment agreements.
“I would recommend that the tax preparer even set up an installment agreement, because if you don’t set up an installment agreement then that’s when the IRS gets a little nervous. They don’t know that your committed to paying off the balance, so then that’s when you start receiving some of those nasty letters,” says Garcia.
The IRS has begun accepting tax returns for businesses, but has not announced when they will begin accepting tax returns for individuals.
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