Tax preparers are concerned that many of the millions of Americans receiving unemployment benefits due to the pandemic are unaware that they might owe money to the IRS next year.
Jobless benefits are subject to federal income taxes, as well as state income taxes in most parts of the country.
But workers who are collecting benefits for the first time may not be aware of those tax implications, or they might opt against having taxes withheld from their benefit payments. People who do not have enough money withheld during the year could end up with smaller refunds or balances due to the IRS when they file their 2020 tax returns. Continue reading.