Can I wait to file unemployment on my taxes?
Filing taxes can be a daunting task, especially when it comes to reporting unemployment benefits. Many individuals wonder if they can delay filing their taxes until they receive their unemployment benefits. In this article, we will discuss the options available to you and the potential benefits of waiting to file unemployment on your taxes.
Understanding Unemployment Benefits and Taxes
Unemployment benefits are typically considered taxable income by the IRS. This means that if you receive unemployment benefits, you are required to report them on your tax return. However, the IRS provides some flexibility regarding the timing of when you must file your taxes, which can be beneficial for those who are waiting to receive their unemployment benefits.
Delaying Tax Filing: Pros and Cons
There are advantages and disadvantages to waiting to file your taxes until you receive your unemployment benefits. Here are some points to consider:
Pros:
1. Accurate Reporting: Waiting to file your taxes ensures that you report the correct amount of unemployment benefits received throughout the year.
2. Potential Refund: If you overpaid taxes during the year, waiting to file can help you receive a larger refund once you include your unemployment benefits.
3. Avoiding Penalties: By waiting to file, you can avoid penalties for underpayment of estimated taxes, as you will be reporting all income at once.
Cons:
1. Delayed Refund: Waiting to file your taxes may result in a delay in receiving your refund, as the IRS may take longer to process your return.
2. Potential for Audits: Filing a tax return after the deadline may raise red flags with the IRS, potentially leading to audits or additional scrutiny.
Options for Filing Taxes with Unemployment Benefits
If you decide to wait to file your taxes, there are a few options available to you:
1. File an Extension: You can file Form 4868 to request an automatic six-month extension. This will give you until October 15th to file your taxes, but you will still need to estimate and pay any taxes owed by April 15th.
2. File a Preliminary Tax Return: You can file a preliminary tax return to report your income and estimate your tax liability. Once you receive your unemployment benefits, you can file an amended return to include the additional income and adjust your tax liability.
3. Wait Until You Receive Benefits: Some individuals choose to wait until they receive their unemployment benefits before filing their taxes. This ensures that they have all the necessary information to accurately report their income.
Conclusion
In conclusion, you can wait to file unemployment on your taxes, but it is important to weigh the pros and cons before making a decision. Waiting to file can provide benefits such as accurate reporting and potential refunds, but it may also result in delayed refunds and increased scrutiny from the IRS. Ultimately, the best approach depends on your individual circumstances and financial situation. Be sure to consult with a tax professional or the IRS for personalized advice on how to proceed with your tax filing.
