If you are unemployed, we wish you the best in finding work. In the meantime, though, be sure to apply these tax tips
Unemployment is Taxable
Include all unemployment compensation as income for the year. You should have received a Form 1099-G, Certain Government Payments, before January 31. It would show the amount received and the amount of any federal income tax withheld.
There are Different Types
Unemployment compensation includes amounts paid under federal law or state law. It may also include railroad, trade readjustment and airline deregulation laws – even some forms of disability payments can count.
Union Benefits May be Taxable
Benefits received from regular union dues as income could be be taxable. Other rules may apply, such as if a taxpayer contributed to a special union fund and those contributions to the fund are not deductible. In this case, report only income exceeding the amount of contributions made.
Tax May be Withheld
Those who receive unemployment can choose to have federal income tax withheld by using Form W-4V, Voluntary Withholding Request. Those choosing not to have tax withheld may need to make estimated tax payments during the year.