I have a question about tax on unemployment income — Will unemployment benefits tax have ramifications on my refund?
Regarding unemployment benefits tax, unemployment benefits are taxable income. If your income goes up because you receive unemployment, your tax liability, due to tax on unemployment income, can go up, too. This means your refund will be lower or you’ll owe more taxes — Unless you covered the increase for tax on unemployment income by either:
- Withholding from your unemployment benefits
- Paying estimated taxes
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Adjusted Gross Income is simply your total gross income minus specific deductions. Additionally, your Adjusted Gross Income is the starting point for calculating your taxes and determining your eligibility for certain tax credits and deductions that you can use to help you lower your overall tax bill.