Beware – Unemployment Benefits are Taxable

With the advent of the Covid-19 pandemic, many workers are applying for jobless benefits for the first time. One survey indicated many recipients are unaware that unemployment benefits are subject to federal income taxes as well as state income taxes in most states. There is also concern that individuals do not know that tax withholding is not automatic.

Unemployment recipients in Minnesota can request withholding when they sign up for the benefit. To start or change tax withholding, individuals can log on to their personal account at www.uimn.org or phone 651-296-3644 in the Twin Cities or 1-877-898-9090 in greater Minnesota. Federal income tax is withheld at a rate of 10 percent.

In Massachusetts, recipients have the option of requesting that federal and/or state income taxes be withheld from weekly benefit payments when they sign up. Federal income taxes are withheld at a rate of 10%, and state income taxes are withheld … Read More

Income Taxes for Estates and Trusts

Estates and trusts are taxed on income they earn, just like individuals. Assets (stocks, bonds, rental property and other interest- and dividend-producing assets) owned by an individual become part of the estate upon their death. Income generated by these assets must be reported to the IRS by the trust or estate. Estates and trusts pay taxes based on rates set by the IRS each year.

Which Estates and Trusts Must File a Form 1041?

The following estates are required to file Form 1041:

  • Estates with gross income of $600 or more for the tax year
  • Estates with a beneficiary who is a nonresident alien

The following trusts are required to file Form 1041:

  • Trusts that have any taxable income at all
  • Trusts that have a gross income of $600 or more regardless of taxable income
  • Trusts with a beneficiary who is a nonresident alien

An estate must obtain a tax ID … Read More

Making Working from Home Work for You

With the onset of the Covid-19 pandemic, many more of us are working from home, and finding it brings new challenges such as having children under foot, creating a workable work space, and avoiding distractions. Here are a few tips to help with these issues.

Children: Set up a desk or desks for each child near your own desk. That way they can complete homework assignments or work on crafts such as coloring while still being nearby. When they aren’t “working” at their desks, you might consider using noise cancelling headphones to help maintain concentration while they play, watch TV, etc.

Workspace: If you are going to be working from home long term, invest in a real desk and some bins or other storage for office supplies. Set up your workspace in a room where you can dedicate either the entire room or a specific measurable portion of the room for … Read More