3. Unemployment benefits
If your unemployment benefits come from a state or federal government fund, they are taxable. In other words, the misfortune of losing a job is taxable too (because Uncle Sam knows how to treat you right). No matter your perspective on this aspect, unemployment benefits are a form of income, so as with all sources of income, they are taxable.
All taxes are different from state to state, so make sure to check out your state’s unemployment tax policies. There’s only one thing that needs your opinion: how would you like to pay the tax you owe? Through withholding or estimated quarterly payments? This tough decision is yours.
If you opt for the latter, do the math first—maybe you won’t be able to pay the amount of money you owe every three months, and of course, you will face consequences.
You’ll not treasure the next taxable thing…..
