Jobless face complications at tax time

Jobless face complications at tax time


http://www.thenewstribune.com/2011/04/10/1620363/jobless-face-complications-at.html

Need2Bworking wrote:Jobless face complications at tax time


http://www.thenewstribune.com/2011/04/10/1620363/jobless-face-complications-at.html

The unemployed have to pay full taxes on their unemployment benefits in 2010, unlike 2009 when the first $2,400 was tax-free.

Those individuals who did not withhold taxes on unemployment benefits are sometimes surprised with an extra $10,000 in income to report in April of the next year, said Annabelle Rodriguez, a tax advisor for H&R Block in Weston, Fla.

Unemployed taxpayers can elect to have 10 percent of their unemployment payment withheld from each check by filing Form W-4V: Voluntary Withholding Request. Unemployed workers who have been paid unemployment compensation in 2010 should receive Form 1099-G showing the amount.

Tax is usually withheld before a company pays severance. But consider your spouse’s income when deciding whether to withhold taxes from your unemployment payments. An unemployed individual who is married and filing income taxes jointly might be best to withhold taxes to avoid surprises, Brewer said. But for a single person only with unemployment benefits as income, any tax owed could get canceled out in a lower tax bracket.