GREENSBORO, N.C. — The countdown is on. There’s a week until tax day.
Seems so weird, tax day being the 15th of July, but here we are.
I asked in a Twitter poll where folks were in the tax return process. Most folks said they had filed and received their return. But check out the bottom part of my poll. It shows the folks who picked “Didn’t COVID cancel taxes”.
Yeah, COVID canceled a lot of things, but taxes isn’t one of them. Sorry. Also, COVID can’t keep you from paying taxes on your unemployment benefits either.
“That is going to be a fairly big surprise to folks come tax time next year. So, when you're sitting down to do taxes next year in 2021,” explained Ryan Dodson from Liberty Tax, “All this unemployment folks have received is considered taxable income. You're going to pay taxes on it.”
The easiest thing to do is to change your designation of the unemployment benefits you get in the future. You can have NC DES take out a percentage for state and federal taxes. The rule of thumb is, if you have them take out 10% you will likely get some money back, but you won’t owe anything.
If you’ve already received your unemployment benefits and didn’t have any taxes taken out, you’ll want to prepare yourself to pay for that income.
Since we’re talking about unemployment, don’t miss the expiring benefits and the extended benefits.