Tens of millions of Americans collected unemployment last year, many for the first time. You may be doing taxes after collecting unemployment insurance for the first time, and it is important to note that the process is different in a few key ways from traditional employment.
When you start a new job, your employer will typically set up tax withholding, where you pay your taxes out of each paycheck and calculate any refunds or additional payments owed come tax time. Jobless aid is taxed similarly to income but does not usually have taxes automatically taken out. This is likely to lead to millions of Americans facing a surprise tax bill this spring as Goldman Sachs estimates taxes on unemployment insurance received last year could reach $50 billion. 38% of Americans receiving benefits were unaware that unemployment insurance is taxable and could be staring down a major financial shortfall.
If you collected unemployment last year, here's what you need to know as you prepare your taxes.
1. You don't need to pay Social Security or Medicare taxes
You will be expected to pay taxes on unemployment benefits, but those taxes will be slightly less than if you had received the same amount from traditional employment. That is because they are exempt from Social Security and Medicare taxes, both of which total 7.65% for a usual worker. This means you may be paying a lower tax rate than you expect.
2. You might not need to pay state taxes
If you live in one of the nine states (Alaska, Florida, Nevada, New Hampshire, South Dakota, Tennessee, Texas, Washington, Wyoming) with no state income tax, your unemployment benefits will also not be taxed on the state level. However, five additional states exempt unemployment insurance from taxation. These states are California, Montana, New Jersey, Pennsylvania and Virginia. If you live in one of these states, you only need to worry about federal taxes on your unemployment benefits. You will likely still need to file taxes for any income from regular employment, but this amount will be much less than if your jobless benefits were also taxed at the state level.
However, things get a bit tricky if you live in Indiana or Wisconsin. Both of these states may allow you to exempt a portion of your jobless benefits from taxation, depending on your total income. In both states, you will need to fill out your "Unemployment Compensation Worksheet" to see if you can exclude any portion of the payments you received.
The United States is a patchwork of different tax policies when it comes to unemployment. Know what your state's policy is.
3. Your stimulus payments are not taxable
The federal government issued two rounds of stimulus payments last year; one in April and one in December. These economic income payments are not taxable and are separate from your jobless aid.
4. The government still has time to reduce your tax bill
If you collected unemployment last year, you might want to consider waiting a bit longer before filing taxes. That's because in February of 2021, Sen. Dick Durbin, D-Ill., and Rep. Cindy Axne, D-Iowa, introduced the Coronavirus Unemployment Benefits Tax Relief Act. If passed, this would waive federal income taxes on the first $10,200 of unemployment benefits received in 2020. This would be a larger version of 2009, when lawmakers provided a similar exemption for up to $2,400 in jobless aid. Right now, it is unclear how likely this bill is to pass both chambers. You may want to consider filing closer to the April 15th deadline or prepare to file an amended return if it does become law.
5. There are options if you cannot afford to pay your tax bill right now
If you haven't set aside enough to pay your tax bill this year, you are not alone and there are other options. The IRS does allow you to apply for a payment plan as well as temporarily delay the collection of your tax debt. Both of these may entail paying interest and fees on top of your tax bill, but this will be much less than if the IRS has to take collection action against you.
If you cannot pay your tax bill by April 15th, contacting the IRS for a payment plan can help you avoid stiff penalties.
6. If you are still on unemployment, set aside money for next year's tax bill
If you haven't been setting aside taxes on your unemployment benefits, you may want to start now to avoid a tax headache next year. Log on to your state's unemployment benefits portal and update your withholding. The federal government will withhold 10 percent of your unemployment income toward your taxes. If you don't, you are still on the hook for the taxes and must determine and pay quarterly estimates on your unemployment income.
7. You may qualify for new tax deductions and credits
Many people saw their incomes reduced by going on unemployment, and this could open up new opportunities to save on your taxes this year. If you were able to work for part of the year, you may now qualify for the Earned Income Tax Credit (EITC), a credit for working people with low to moderate income. Unemployment is not considered "earned" income in this case, so you will likely only qualify if you earned income from traditional work this year. Your exact qualification will depend on a variety of factors including your dependents, your filing status, and your total earned income.
If you were able to save last year, you may also be able to qualify for the saver's credit. This would allow you to receive a credit of between 10% to 50% of your contribution to retirement account, depending on your income and filing status. Remember that you still have time to claim this credit as the deadline to contribute to last year's IRA is not Tax Day this year. If you qualify, you may wish to make a contribution before filing taxes in order to claim the credit.
Your state may have additional credits for you to take advantage of, such as the income-based renter's credit in thirteen states. Look at the tax credits available in your state to take full advantage of any help available in what may be a lower-earnings year for you.
Disclaimer: Paypath and its affiliates do not provide tax, legal or accounting services. This material has been prepared for informational purposes only, and is not intended to provide, and should not be relied on for, tax, legal or accounting advice. If you have any concerns regarding your unique tax situation, you should consult your own tax, legal and accounting advisors.
Over the past month, both Haiti and Afghanistan have been pummeled by tragic disasters that left devastation in their wake.
In Haiti, a 7.2 magnitude earthquake erupted, leading over to 2,189 deaths and counting. A few hours later, in Afghanistan, Kabul fell to the Taliban just after U.S. troops had pulled out after 20 years of war.
In many ways, these disasters are both chillingly connected to US interference. The United States invaded Haiti in 1915, ostensibly promising to restore order after a presidential assassination but really intending to preserve the route to the Panama Canal and to defend US creditors, among other reasons.
But the US forces soon realized that they were not able to control the country alone, and so formed an army of Haitian enlistees, powered by US air power and intended to quell Haitian insurrection against US controls. Then, in 1934, the US pulled out on its own, disappointed with how slow progress was going. Haiti's institutions were never really able to rebuild themselves, leaving them immensely vulnerable to natural disasters.
Something similar happened in Afghanistan, where the US sent troops and supported an insurgent Afghan army – only to pull out, abandoning the country they left in ruins, with many Afghans supporting the Taliban.
In both cases, defense contractors benefited by far the most from the conflict, making billions in profits while civilians faced fallout and devastation. While the conflicts and circumstances are extremely different and while the US is obviously not solely to blame for either crisis, it's hard not to see the US-based roots of these disasters.
Today, in Haiti and Afghanistan, civilians are facing unimaginable tragedy.
Here are charities offering support in Afghanistan:
1. The International Rescue Committee is looking to raise $10 million to deliver aid directly to Afghanistan
2. CARE is matching donations for an Afghanistan relief fund. They are providing food, shelter, and water to families in need; a donation of $89.50 covers 1 family's emergency needs for a month.
3. Women for Women International is matching donations up to 500,000 for Afghan women, who will be facing unimaginable horrors under Taliban control.
4. AfghanAid offers support for people living in remote regions of Afghanistan.
5. VitalVoices supports female leaders and changemakers and survivors of gender-based violence around the world.
Here are charities offering support in Haiti:
1. Partners in Health has been working with Haiti for a long time, and they work with the Department of Health rather than around them, which is extremely important in a charity.
2. Health Equity International helps run Saint Boniface Hospital, a hospital in Haiti close to the earthquake's epicenter.
3. SOIL is an organization based Haiti, "a local organization with a track record of supporting after natural disasters." They are distributing hygiene kits and provisions on the ground to hospitals and to victims of the earthquake.
4. Hope for Haiti has been working in emergency response in Haiti for three decades, and their team is comprised of people who live and work in Haiti. They focus on supporting children and people in need across Haiti.
When the new Tiffany's campaign was unveiled, reactions were mixed.
Tiffany's, the iconic jewelry brand which does not (despite what some might be misled to believe) in fact serve breakfast, featured Jay Z, Beyoncé, and a rare Basquiat painting in their recent campaign.
The aesthetics were undeniably luxe and historic. The campaign showcased the rarely-seen Basquiat painting Equals Pi (1982), which the brand acquired for the background's proximity to its distinctive Tiffany blue. Also notably historic is that Beyoncé was the first Black woman to wear the 128.54 carat Tiffany Diamond.
Before Beyoncé, the only other stars to wear the yellow diamond were Mary Whitehouse, wife of American diplomat Edwin Sheldon Whitehouse, Hollywood icon Audrey Hepburn, and singer Lady Gaga.
"Beyoncé and Jay-Z are the epitome of the modern love story …. Love is the diamond that the jewelry and art decorate," said the press release accompanying the campaign.
The campaign, titled "About Love," is stunning and has both classic and contemporary references. The image of the couple posing in front of high art recalled the iconic stills from their "APESHIT" music video, for which they famously rented out the Louvre and posed in front of the Mona Lisa.
THE CARTERS - APESHIT (Official Video) www.youtube.com
Their "APESHIT" photo made a giant cultural impact for its juxtaposition of Western beauty and Blackness. Tiffany's campaign seemed to have similar goals — showcasing Beyoncé and Jay Z as the peak of luxury, this time juxtaposing the Basquiat and the Tiffany diamond.
As a Black couple, their appearance in such a luxury campaign was a big move for representation, but in a post 2020 landscape, there was an outcry of criticism.
Despite the aesthetic beauty of the image, the high capitalist undertones didn't sit right with some on the internet — largely younger demographics. Though this campaign was an effort by Tiffany's to appeal to younger audiences and make the brand feel more relevant, Twitter's verdict was clear: a blood diamond wasn't the way to go.
The diamond, which was mined in South Africa in 1877, comes from origins laden in the implications of colonialism. The practice of mining in South Africa at the time was exploitative and destructive, eschewing the livelihoods and safety of African miners and their communities for... what? Money? So Tiffany could try to sell us some dream of affluence using Black celebrities as to "Blackwash" the history behind their treasured piece?
The Washington Post also had some choice words, saying: "Its campaign does not celebrate Black liberation — it elevates a painful symbol of colonialism. It presents an ostentatious display of wealth as a sign of progress in an age when Black Americans possess just 4 percent of the United States's total household wealth. If Black success is defined by being paid to wear White people's large colonial diamonds, then we are truly still in the sunken place."
Alongside the campaign, Tiffany & Co have promised to donate $2 million to HBCUs to fund scholarships and internships. But this measly amount (considering the multi-billion dollar net worth behind LVMH) is not enough to cover up that, despite their performative efforts to promote "diversity," Tiffany's is entrenched in a colonial history that neither beauty nor Beyonce can make us ignore.
While Black representation has been increasing over the past few years, the question of how we are represented is starting to be considered with more nuance. And as we examine the structures of wealth and hierarchical values, many people are starting to ask whether these should be the standards we aspire to anymore.
Jay Z and Beyoncé have come under fire before for their promotion of Black Capitalist values — which the kids don't seem to want. Jay Z especially seems invested in the trappings of traditional (read: white) success and wealth. His cannabis line recently unveiled a campaign based on the work Slim Aarons — which was famously focused on "attractive people doing attractive things in attractive places" — and its unashamed opulence raised some eyebrows.
Images like this aren't as revolutionary as they once might have been since they reinforce the status quo and tell marginalized people to reach for the same luxuries and lifestyles deemed aspirational by the people who have oppressed them.
Anti-capitalist theory has been around as long as capitalism has, but younger generations are more likely to question the status quo — even when it comes packed with Basquiat and Beyoncé.
The conversation about the Tiffany campaign is indicative of how Gen Z thinks differently about money and what it means to them. They are less likely to be seduced by the luster of the aspirational, and more receptive to relatability.
No more does financial literacy seem restricted to the pretentious or the elite — we get it, finance bros; you love capitalism. With Cleo, understanding your money is something that can align users with their values.
And those values don't look like blood diamonds or corporate pandering.
- Sorry, Beyoncé, but Tiffany's blood diamonds aren't a girl's best friend - Washington Post
- The Black-white wealth gap left Black households more vulnerable — Brookings
- The Unashamed Opulence of Jay Z's Luxury Cannabis-Themed Slim Aarons Photoshoot — Popdust
- ATTRACTIVE PEOPLE DOING ATTRACTIVE THINGS IN ATTRACTIVE PLACES WITH SLIM AARONS — Elle Decor
Road trips can be a lot of fun — but they can also drain your wallet quickly if you aren't careful.
From high gas costs and park admission fares to lodging and the price of eating out every night, the expenses can add up quickly. But at the same time, it's very possible to do road trips cheaply and efficiently. Without the headache of worrying about how much money you're leaking, you can enjoy the open road a whole lot more. Here's how to save money on a road trip.
1. Prepare Your Budget, Route, and Packing List in Advance
If you want to save money on a road trip, be sure you're ready to go. Try to count up all your expenses before you hit the road and create a budget. It's also a good idea to plan your route in advance so you don't end up taking unnecessary, gas-guzzling detours. And finally, be sure to pack in advance so you don't find yourself having to buy tons of things you forgot along the way.
2. Book Cheap Accommodations — Or Try Camping
All those motel rooms can add up surprisingly quick, but camping is often cheap or free, and it's a great way to get intimate with the place you're visiting. You can check the Bureau of Land Management's website for free campsites. Freecampsite.com also provides great information on If you don't have a tent or don't want to camp every night, try booking cheap Airbnbs or booking hotels in advance, making sure to compare prices.
camping road tripConde Nast Traveler
If you're planning on sleeping in your car, a few tips: WalMart allows all-night parking, as do many 24-hour gyms. (Buying a membership to Planet Fitness or something like it also gives you a great place to stop, shower, and recharge while on the road).
3. Bring Food From Home
Don't go on a road trip expecting to subsist on fast food alone. You'll wind up feeling like shit, and it'll drain your pocketbook stunningly quickly. Instead, be sure to bring food from home. Consider buying a gas stove and a coffee pot for easy on-the-go meals, and make sure you bring substantial snacks to satiate midday or late night cravings so you can avoid getting those late night Mickey D's expeditions.
Try bringing your own cooler, filling it with easy stuff for breakfast and lunch — some bread and peanut butter and jelly will go a long way. Bring your own utensils, plates, and napkins, and avoid buying bottled water by packing some big water jugs and a reusable water bottle. Alternatively, try staying at hotels or Airbnbs with kitchens so you can cook there.
4. Avoid Tolls
Apps like Google Maps and Waze point out toll locations, so be sure to avoid those to save those pennies. (If it takes you too far off route, you might have to bite the bullet and drive across that expensive bridge).
You can also save on parking fees by using sites like Parkopedia.
Road TripThe Orange Backpack
5. Save on Gas
Gas can get pricy incredibly fast, so be sure that you're stopping at cheap gas stations. Free apps like GasBuddy help you find the most affordable gas prices in the area. Also, try going the speed limit on the highways — anything faster will burn through your tank. Be sure that you don't wait till you arrive at touristy locations or big cities to fill up.
6. Get a National Park Pass
All those parks can get really expensive really fast. If you're planning on visiting three or more parks, it's a great idea to get an America the Beautiful National Parks Pass. For $80 you can get into every National Park for one year.