Do you qualify for unemployment benefits? How will they change my tax return?

If you lose your job, you may qualify for unemployment benefits. While these payments may come as a relief, it’s important to remember that they may be taxable. Here are the key facts about unemployment compensation: 

Unemployment is taxable — You must include all unemployment compensation as income for the year. You should receive a Form 1099-G, Certain Government Payments by Jan. 31 of the following year. This form will show the amount paid to you and the amount of any federal income tax withheld. We can help you file your taxes. Visit prodigyfsg.com/Tax-Preparation

• Paid under U.S. or state law — There are various types of unemployment compensation. Unemployment includes amounts paid under U.S. or state unemployment compensation laws. For more information, see Publication 525, Taxable and Nontaxable Income.

• Union benefits may be taxable — You must include benefits paid to you from regular union dues in your income. Other rules may apply if you contributed to a special union fund and your contributions to the fund are not deductible. In that case, you only include as income any amount that you got that was more than the contributions you made. If you need help filing your return – we can help! Contact Us

• You may have tax withheld — You can choose to have federal income tax withheld from your unemployment. You can have this done using Form W-4V, Voluntary Withholding Request. If you choose not to have tax withheld, you may need to make estimated tax payments during the year. If you owe back taxes and need help Contact US Today. For more information on a no out of pocket cost Consultation visit https://prodigyfsg.com/tax-consultation/

• Visit www.prodigyfsg.com or IRS.gov for help — If you’re facing financial difficulties, you can visit the IRS.gov page: “What Ifs” for Struggling Taxpayers. This page explains the tax effect of events such as job loss. For example, if your income decreased, you may be eligible for certain tax credits, like the Earned Income Tax Credit.

If you owe federal taxes and can’t pay your IRS bill, Contact Us to review your options. In many cases, we can take steps to help ease your financial burden. If you need IRS Tax Relief – don’t wait – call today – (844)208-7408. For more details visit www.prodigyfsg.com.

Each and every taxpayer has a set of fundamental rights they should be aware of when dealing with the IRS. These are your Taxpayer Bill of Rights. Explore your rights and our obligations to protect them on www.prodigyfsg.com. You have the Right to be Represented before the IRS. Choose an Experienced Enrolled Agent – Americas Tax Professionals.