Received unemployment and already filed your 2020 tax return?

[SlugSlinger]

Edit - The IRS is now saying do not re-file or file an amended tax return if you claimed unemployment income on your 2020 tax return. The IRS will provide information when they get this figured out.


"The latest updates to the $1.9 trillion federal coronavirus relief package could save millions of people from a surprise tax bill.

The Senate on Saturday passed a version of the Covid relief package that is slightly different than the one passed by the House. Senate Democrats agreed to lower additional unemployment aid to $300 per week from $400 but extended the payments through Sept. 6.

They also included a provision to waive taxes on the first $10,200 in unemployment income for those who made less than $150,000 in adjusted gross income in 2020.

Making the first $10,200 of unemployment insurance income untaxable is aimed at keeping families from being hit with a surprise tax bill at a difficult time for many. In 2020, roughly 40 million Americans collected unemployment insurance benefits, according to a February research paper written by Brian Galle and Elizabeth Pancotti for The Century Foundation."

 

[bigfug]

Surprise tax bill? Did they not realize its taxable income? Or that you can have taxes pulled from unemployment?

 

[tRidiot]

Surprise tax bill? Did they not realize its taxable income? Or that you can have taxes pulled from unemployment?

Uhhh... yeah, most people aren't forward-thinking like that these days.

For me, any time I get any kind of money or check or anything, I have to worry about how it is going to affect my taxes. I have to take extra out. I make tons of charitable contributions, in part to reduce my tax burden. I try to max out my retirement funding, in part to reduce current tax liability.

But no, from listening to the conversations around me, I don't think most people think about that. Not at all. They just think they got money, that's what matters, then they b***h at tax time about how unfair it is. I pay a much MUCH higher total AND I pay a higher percentage.

But I'll probably STILL end up owing taxes this year, after taking a massive pay cut each of the last several years, after increasing my withholding and having to take out an advance payment loan to keep my business afloat - which counted as taxable income, but now I have to pay back, including the taxed portion.

 

[bigfug]

Uhhh... yeah, most people aren't forward-thinking like that these days.

For me, any time I get any kind of money or check or anything, I have to worry about how it is going to affect my taxes. I have to take extra out. I make tons of charitable contributions, in part to reduce my tax burden. I try to max out my retirement funding, in part to reduce current tax liability.

But no, from listening to the conversations around me, I don't think most people think about that. Not at all. They just think they got money, that's what matters, then they b***h at tax time about how unfair it is. I pay a much MUCH higher total AND I pay a higher percentage.

But I'll probably STILL end up owing taxes this year, after taking a massive pay cut each of the last several years, after increasing my withholding and having to take out an advance payment loan to keep my business afloat - which counted as taxable income, but now I have to pay back, including the taxed portion.

Trust me, I understand. My wife is an RN, and is PRN at an elective surgery center and they dont have hours for her. But one of the first questions asked when she went on unemployment at the beginning of the pandemic was, do you want taxes withheld.

 

[tRidiot]

Yup. My salary now is about 1/4 of what it was 3 years ago. The ONLY good news about that is that I'm no longer paying 6 figures in taxes.<sigh>

 

[OKNewshawk]

Could you provide a source for this? I need to research it more. I could take advantage of it!
Edit: Never mind. I checked in TurboTax and found the information I needed. Turbotax says that the IRS will be contacting me with instructions on how to proceed.

 

[Mos Eisley]

I had to be in combat before they no longer withheld taxes from my pay.

 

[SlugSlinger]

Surprise tax bill? Did they not realize its taxable income? Or that you can have taxes pulled from unemployment?

Yeah, that's an MSN story. Their readers would be surprised when they had to pay any tax.

 

[freewookie]

Ugh just filed my oldest son’s taxes last week to try to get his direct deposit updated for the stimulus check.


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[Hawgman]

My wife qualified for the boosted unemployment last year and told them yes, take out taxes. After she had already received about 4 or 5 checks I saw that they take out only 10 percent. Pointed out that ain't even enough. So we had to play catch up and sock away what we could as to avoid the "who knows what this will cost us" tax time bill. So hey, if they wind up not taxing it we'll be more like the ant than the grasshopper. Likely do something exciting with it like pay on the mortgage or car loan.