Covid-19 has caused a tremendous amount of financial pain across the U.S. Many of us have turned to Unemployment Insurance (or U.I.), and Pandemic Unemployment Assistance (which is an extension of U.I.), in order to support ourselves and our families. Although extremely helpful, the money we receive will eventually end. As many parts of the country are opening up their economies, some may return to work while others continue collecting assistance. Either way, you do need to plan your finances for the rest of the year.
One important consideration is taxes. According to Business Insider, you will need to report U.I. as part of your gross income for both your Federal and State taxes. There are a few states that are waiving taxability on this money so check with your state.
You can insure money is set aside by requesting that 10% of the money you receive is withheld. If you haven’t done this, it is not too late. The media outlet CHRON says that when you file weekly or bi-monthly you can change your deduction so 10% will be withheld. This change will not be retroactive, so make sure you plan accordingly for filing in April 2021.
Tomorrow: You were just involved in a car accident, what do you do?