What to Expect from the IRS in 2021 if You didn’t Pay Unemployment Taxes in 2020
This may come as a surprise, but by law, unemployment compensation is taxable and must be reported on your 2020 federal tax return. Taxable benefits include any unemployment compensation under the Coronavirus Aid, Relief, and Economic Security (CARES) Act.
The only way to avoid paying unemployment taxes, is if you have the tax withheld from your benefits. Otherwise, you needed to have filed your taxes by the July 15th deadline unless you applied for an extension.
If you did neither of these, you can expect the IRS to give you penalties and come after you with collections.
How Can You Protect Yourself from IRS Penalties and Collections?
For those who missed the 2020 filing deadline and still owe taxes on their unemployment, you are not out of options – there is a federal tax relief program you may qualify for.
The IRS Fresh Start Program was created almost a decade ago by the Federal Government to protect taxpayers from aggressive IRS collection tactics. Every year, the IRS Fresh Start Program helps taxpayers save thousands by reducing their tax debt to a more reasonable amount.
While ‘IRS’ is in the title, the IRS must follow the regulations set in place by the Federal Government. Most taxpayers have never heard of this program before because the IRS hardly advertises it – they’d prefer to put you on a payment plan that would allow them to collect more money from you.
Don’t Wait to Apply for the IRS Fresh Start Program
As cliché as it sounds, you do not want to wait to apply for the IRS Fresh Start Program, primarily because the IRS is preparing to ramp up collection activity in 2021.
The IRS has not been working at full capacity, but by 2021, they are hopeful that operations will return to normal. When that time comes, they will be focusing all their efforts on catching up on audits, misfiles, and letters.
Even if you haven’t received an IRS letter yet, know that one is imminent. Don’t wait until your returns or wages are garnished! Take our brief Tax Relief Survey now to see if you are eligible for protection from the IRS before they return to full operations.
See if you qualify for the Fresh Start Program today!
We provide our tax relief survey as a FREE resource – see if you qualify today!
- Answer a few questions about your finances
- Qualify and be presented with a resolution
- Enroll in Fresh Start
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