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5 Financial Surprises to Prepare for in 2021
While 2020 offered many financial assistance programs to help battle the virus, there are still some areas to financially prepare for within this new year.
We made many financial adjustments this last year due to the virus and many of those changes will continue into 2021.
However, understanding how our income can be impacted can help us prepare for the added costs.
Here are some areas to look out for to consider preparing for in 2021.
Unemployment Taxes
Unemployment benefits are taxable and many don’t know this when they start to file.
It can be easy to overlook the federal withholding questions when you file or you just want every dollar accessible right now.
Make sure you save up a portion of your funds to avoid the surprise cost when you file your 2020 tax return.
According to Fox 8, “Unemployment benefits are taxable income and if you did not withhold money from each check, then you’ll owe about 10 percent when you file.”
Fortunately, the IRS has options available to cover the costs of taxes such as a repayment plan option so you shouldn’t avoid filing your taxes if you think you can’t afford it.