Jump to content
Sniper

People Finding Out They Have Large Tax Bills Due if they Collected Unemployment last year

Recommended Posts

Seeing more and more reports that people who collected unemployment (and pandemic $600 and $300 kickers) are getting large tax bills when filling their taxes. Seems the majority didn't have taxes withheld on their U.E. checks, and now when doing their 2020 taxes, are seeing BIG tax payment due.

I know there were a few here who collected U.E. last year when everything closed down. Just a heads up if you haven't done your taxes yet... you'll be in for a big surprise.

....."Rose is among millions of unemployed workers facing surprise tax bills, ranging from several hundred to several thousand dollars, and many say they just cannot pay. For tax purposes, weekly unemployment payments count as income just like wages from a job. But few people realize the money they get from the government is actually taxable. Fewer than 40 percent of the 40 million unemployed workers in 2020 had taxes withheld from their payments, according to the Century Foundation, a left-leaning think tank.

For people who have been without a job for nearly a year, finding money to pay their tax bills is yet another financial burden coming at a fraught time. Advocates for the poor as well as some Democratic lawmakers are trying to get these tax bills waived entirely — or at least reduced."

Share this post


Link to post
Share on other sites

Yup, dumbasses.. can't say your surprised when it's a major question asked upon filing. Wife went on FML, had taxes withheld. There is no reason it shouldn't be mandatory for the lowest tax rate, with the option to withhold more to CYA. 

You're an asshole if this comes as a surprise. It literally means you didn't read a damn thing you filled out when applying. 

  • Agree 1

Share this post


Link to post
Share on other sites
2 hours ago, Sniper said:

Advocates for the poor as well as some Democratic lawmakers are trying to get these tax bills waived entirely — or at least reduced."

They better not do this. I had to pay taxes 4 years ago when I got laid off. Plus the IRS will always give you a payment plan to pay back taxes.

Share this post


Link to post
Share on other sites
13 minutes ago, brucin said:

They better not do this. I had to pay taxes 4 years ago when I got laid off. Plus the IRS will always give you a payment plan to pay back taxes.

Poor people already pay no taxes, so I have no idea what they're talking about. 

Share this post


Link to post
Share on other sites

Just heard they’re going to do federal booster for unemployment tax exempt, and extend it even further. Why anyone making less than 30hr would go back to work, well that might be part of the plan. 

Share this post


Link to post
Share on other sites
6 hours ago, JackDaWack said:

You're an asshole if this comes as a surprise. It literally means you didn't read a damn thing you filled out when applying. 

Exactly... they saw the $600 or $300 direct deposits, with nothing withheld for taxes... It should be no surprise, but many are clueless..

4 hours ago, brucin said:

They better not do this. I had to pay taxes 4 years ago when I got laid off. Plus the IRS will always give you a payment plan to pay back taxes.

Too late, looks like it was included in the $1.9 TRILLION stimulus bill signed by the Senate today. It waives income taxes on the first $10,200 in UE payments. I believe this is retroactive for 2020, so those who already filed, will need to do an amended return.

2 hours ago, 0Jeep4 said:

Just heard they’re going to do federal booster for unemployment tax exempt, and extend it even further. Why anyone making less than 30hr would go back to work, well that might be part of the plan. 

Yep... UE extended to September with today's passed bill, with a $300/week kicker on top of the normal U.E. payment... what low wage person will go back to work with getting those lottery winnings?

Share this post


Link to post
Share on other sites
3 hours ago, Sniper said:

It waives income taxes on the first $10,200 in UE payments. I believe this is retroactive for 2020, so those who already filed, will need to do an amended return.

I just saw someone post a question regarding this waiver. If they're going to waive taxes on that first $10,200 of unemployment funds, will they do that also for all the regular taxpayers too, who didn't collect any U.E. money?

It's only fair..

Or, will the people paying taxes from regular wages get screwed..... again.....?

  • Like 1

Share this post


Link to post
Share on other sites
6 hours ago, 0Jeep4 said:

Just heard they’re going to do federal booster for unemployment tax exempt, and extend it even further. Why anyone making less than 30hr would go back to work, well that might be part of the plan. 

this is probably part of why i'm getting zero response to my help wanted on the shops farcebook page. that and i mentioned the need to be able to pass a background check.

Share this post


Link to post
Share on other sites

I do anywhere between 100 and 250 personal returns a year.  This has always been a problem in NJ.  Unemployment payments are not subject to state taxes but are, for some reason, taxable at the federal level.  This has always presented problems for some.  Even when you tell the state to withhold federal taxes, they often fail to take out enough.  

The worst case is a married couple where one collects while the other continues to work.  This can put the unemployment into a higher tax bracket and under withholding occurs.  

We are seeing more problems this year simply because more people collected unemployment last year and the payments were considerably higher.

14 hours ago, bennj said:

Now see it's being waived for those who didn't.

No . . . The deal, which I do not believe is in place yet, has nothing to do with whether or not the taxpayer had any federal taxes withheld.  They are talking about waiving taxes for the first $10,200 in payments for anyone who collected.  Yes, if this goes through and you have already filed, you MAY have to file an amended return but there are other ways that it could be handled by the IRS.  We don't know yet.

Share this post


Link to post
Share on other sites
2 hours ago, EdF said:

I do anywhere between 100 and 250 personal returns a year.  This has always been a problem in NJ.  Unemployment payments are not subject to state taxes but are, for some reason, taxable at the federal level.  This has always presented problems for some.  Even when you tell the state to withhold federal taxes, they often fail to take out enough.  

The worst case is a married couple where one collects while the other continues to work.  This can put the unemployment into a higher tax bracket and under withholding occurs.  

We are seeing more problems this year simply because more people collected unemployment last year and the payments were considerably higher.

No . . . The deal, which I do not believe is in place yet, has nothing to do with whether or not the taxpayer had any federal taxes withheld.  They are talking about waiving taxes for the first $10,200 in payments for anyone who collected.  Yes, if this goes through and you have already filed, you MAY have to file an amended return but there are other ways that it could be handled by the IRS.  We don't know yet.

Do you know if unemployment and FML fall under the same category for taxes, in that FML qualifies for the $10,200 waiver? I have to do taxes in the next week and was going to search this out anyway. 

Share this post


Link to post
Share on other sites
21 minutes ago, JackDaWack said:

Do you know if unemployment and FML fall under the same category for taxes, in that FML qualifies for the $10,200 waiver?

They do not.  I haven't heard any talk about exclusions for Family Leave.  Unemployment has it's own line on the 1040 form and is treated as a unique type of income.  We don't see a lot of FML in our office.  You need to see how it is handled on your W-2.

I'd be happy to talk to you privately if you need any help.

  • Thanks 1

Share this post


Link to post
Share on other sites
On 3/6/2021 at 10:41 AM, Sniper said:

Seeing more and more reports that people who collected unemployment (and pandemic $600 and $300 kickers) are getting large tax bills when filling their taxes. Seems the majority didn't have taxes withheld on their U.E. checks, and now when doing their 2020 taxes, are seeing BIG tax payment due.

I know there were a few here who collected U.E. last year when everything closed down. Just a heads up if you haven't done your taxes yet... you'll be in for a big surprise.

....."Rose is among millions of unemployed workers facing surprise tax bills, ranging from several hundred to several thousand dollars, and many say they just cannot pay. For tax purposes, weekly unemployment payments count as income just like wages from a job. But few people realize the money they get from the government is actually taxable. Fewer than 40 percent of the 40 million unemployed workers in 2020 had taxes withheld from their payments, according to the Century Foundation, a left-leaning think tank.

For people who have been without a job for nearly a year, finding money to pay their tax bills is yet another financial burden coming at a fraught time. Advocates for the poor as well as some Democratic lawmakers are trying to get these tax bills waived entirely — or at least reduced

 

 

Share this post


Link to post
Share on other sites

on thi sone.......i put an ad up on my shops farcebook page(this has gotten responses within hours in the past) about 2 weeks ago. so far, zero response. just came back from taking mom out to dinner. the owner of the diner's goin nutty, 'cause he can't find anyone that wants to work. it seems that this unemployment crap's doing what the socialists want. in my case, it could also be that i noted in the ad that the applicant must be able to pass a state background check.

Share this post


Link to post
Share on other sites
1 hour ago, 1LtCAP said:

on thi sone.......i put an ad up on my shops farcebook page(this has gotten responses within hours in the past) about 2 weeks ago. so far, zero response. just came back from taking mom out to dinner. the owner of the diner's goin nutty, 'cause he can't find anyone that wants to work. it seems that this unemployment crap's doing what the socialists want. in my case, it could also be that i noted in the ad that the applicant must be able to pass a state background check.

Yup. Impossible to hire any cooks. Id be so bored on unemployment for a year. 

Share this post


Link to post
Share on other sites

Join the conversation

You can post now and register later. If you have an account, sign in now to post with your account.

Guest
Reply to this topic...

×   Pasted as rich text.   Paste as plain text instead

  Only 75 emoji are allowed.

×   Your link has been automatically embedded.   Display as a link instead

×   Your previous content has been restored.   Clear editor

×   You cannot paste images directly. Upload or insert images from URL.

Loading...

  • Recently Browsing   0 members

    No registered users viewing this page.



×
×
  • Create New...