- All unemployment compensation must be included in your income for the year. You should receive a Form 1099-G Certain Government Payments which will show the amount paid to you and the amount of any federal income taxes withheld.
- Any regular union dues in your income must be included in your benefits paid to you. Different rules may apply if you contribute to a special union fund and those contributions are not deductible. In that case only include as income any amount you get that is more than the contributions you made.
- You can choose to have federal income tax withheld from your unemployment if you use Form W-4V Voluntary Withholding Request. If you choose not to have tax withheld you may have to make estimated payments during the year.
- If you face any financial difficulties What Ifs for Struggling Taxpayers on the IRS website which will explain the tax effects of events such as the loss of a job. For example if your income decreased you may be eligible for some tax credits such as the Earned Income Tax Credit. If you owe federal taxes and can’t pay your bill contact the IRS as soon as possible. In many cases the IRS can take steps to help ease your financial burden.
The tax professionals at Lindemeyer CPA are also able to answer questions you have. Schedule a first consultation with us for tax advice in the Louisville and Crestwood areas.
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