Unemployment Benefits & Taxes
Have you received unemployment benefits this year?
The IRS counts unemployment benefits as taxable income. There are three ways to prepare now and avoid a painful surprise next April. Elect to withhold 10% of your unemployment compensation by filling out IRS Form W-4V. It will withhold that amount in future benefits but it’s not retroactive.
You can estimate and make quarterly payments using IRS Form 1040 – ES. Or, deposit your estimated taxes into a bank account that you absolutely do not touch. Remember, “He who walks in integrity walks securely, but he who perverts his ways will be found out.” (Proverbs 10:9)
For help managing your money, take our “30 Day Money Reset” challenge at crown.org.