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Unemployment Compensation

Unemployment Compensation

  • Is your unemployment Income Taxable? A lot of it depends on how much other income you have that year.
  • Ask your CPA to do tax projection and tax planning for you.
  • You may end up with payment plans or those kinds of things. Definitely, make sure you check with your CPA or tax preparer, if you have unemployment income.

Hey everybody! This is Shauna, the Tax Goddess from TaxGoddess.com and StrategicTaxCoach.com. Today, I want to talk about unemployment compensation. It’s one of those cases where everybody needs it sometime. Hopefully, nobody’s ever unemployed. But there are reasons and of course, sometimes stuff just happens. The question, of course, that we get phone calls in about quite often is, ‘is my unemployment income taxable?”

A lot of it depends on how much other income you have that year. So definitely make sure that you reach out to your CPA and ask that question, that they do a little bit of tax projection and tax planning for you. Make sure you know whether you should or should not have a withholding on that unemployment income. We`ve seen cases, especially in some of the higher unemployment income states like California where taxpayers will actually earn that unemployment income and then have quite a hefty tax bill the following year and of course, if you haven’t found another job by that point that can be a problem. You may end up with payment plans or those kinds of things. Definitely, make sure you check with your CPA or tax preparer to do tax projections if you have unemployment income. They can whip up tax projections pretty quick, I’d say in about an hour. Make sure that you’re on track and you don’t owe any additional taxes.

All right. Thanks so much. Give us a shout if you have any questions or need any help. Talk to you later. Thanks. Bye.

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