Levins Tax Law
Schedule your initial consultation:
866-485-7019

The IRS will expect its share of unemployment benefits

Many people here in Boston are among the millions of people across the country who are not working right now. Those fortunate enough to receive unemployment benefits are also receiving an extra boost from the federal government to make those payments go further. However, anyone in this position should know that the IRS and the state of Massachusetts tax those benefits, and they need to be prepared for that.

There is some good news. Recipients will not need to pay Medicare or Social Security taxes on the benefits they receive. Many Boston residents will need to file a tax return including this money. However, the normal rules apply to who will need to file a return and who will not need to. In any case, it is possible to avoid a hefty tax bill when the time comes to file next year.

Individuals can decide to have taxes withheld from their unemployment benefits in order to lessen the amount of taxes owed on them. Another alternative is to make quarterly payments instead, but they need to be properly calculated in order to avoid penalties at tax time. Those who decide to not have any taxes taken out of their benefits may find themselves in a precarious position next year.

Determining the best way to handle taxes on unemployment benefits will most likely raise numerous questions and concerns. While most people need the money right now, it would still be a good idea to look to the future as well. Conducting some research and crunching some numbers would probably be the best way to decide what would work best for a particular individual's circumstances. The important thing to remember is that the IRS will be expecting some payment -- one way or another.

No Comments

Leave a comment
Comment Information
Email Us For a Response

Resolve Your Tax Problems

Bold labels are required.

Contact Information
disclaimer.

The use of the Internet or this form for communication with the firm or any individual member of the firm does not establish an attorney-client relationship. Confidential or time-sensitive information should not be sent through this form.

close

Framingham Office
1671 Worcester Road
Suite 304
Framingham, MA 01701

Framingham Tax Law Office

Boston Office
38 Newbury Street
6th Floor
Boston, MA 02116

Boston Tax Law Office

By Appointment Only