The US Senate has proposed extending unemployment benefits for an additional 13 weeks for jobless,and up to 26 weeks for those who live in states with the highest rates of unemployment,which does not affect me personally,but will benefit alot of people who still haven't been able to find suitable employment.
However,there seems to be a misconception among some recipients that they do not have to pay taxes on unemployment compensation and that is so WRONG!I had someone tell me personally they collected benefits for several months and did not report it when they filed their tax returns,and they received refunds-totally oblivious to the fact that Unemployment Insurance reports those benefits to the IRS and State Comptrollers,and once they catch up with the person,their nightmare will begin.Typically,although they will deduct taxes from your benefits if you specify it,the majority of recipients do not opt to pay,failing to realize that they will end up OWEING taxes at the end of the year on those unemployment checks.A relative of mine who works in a seasonal industry and collects unemployment for the months he cannot work found this out the hard way-once he started working again the IRS placed an attachment on his wages for taxes due and took him to the cleaners for the tax debt,as well as late fees and penalties.He now has taxes deducted from his checks before he gets dime number one and has not had the problem again.
Please remember-unemployment benefits ARE taxable and once you owe the IRS,they WILL go after you for the money owed-as will the state.Don't end up paying more than you have to by putting it off because it will come back to bite you in the butt!
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