The whole world is going through a global economic slowdown and it has impacted the US a lot. Over 22 million Americans have lost their jobs due to the global health crisis and they are now dependent on unemployment benefits. However, the serious problem for them is to pay their taxes.
Since the unemployment benefits are taxable, it is really a big problem for those who are currently not earning any income due to the loss of their jobs. Many financial experts have shared that unemployed people can easily save their taxes by following certain tips.
Withholding Taxes
While applying for employment benefits, the US people can ask the state agency to withhold 10% of their payments in order to cover federal income taxes. People receiving employment benefits can easily fill out IRS Form W-4V and Voluntary Withholding Request to do so.
Focus on Saving Part of Income
The focus of every unemployed American should be on saving some part of their income from each benefit payment. This is important to prepare for the worst outcome in case the situation worsens at the end of a year. It is not an easy thing to do for many right now and most of the Americans may transfer the burden of paying tax for the next year.
Choose to Pay Estimated Taxes
According to financial experts, choosing to pay estimated taxes is also a good option in case one doesn’t want to have the taxes withheld.
Many changes have been introduced by the current global pandemic and it has transformed the US financial system a lot. A lot of employers are now looking for w2 lookup 2020 form online to calculate their taxes. And it has sped up the tax procedure a lot.