The Internal Revenue Service is quite possibly the most hated government agency in the United States. Hate it or just dread it, you still have to deal with it. While everyone with a job knows they have to pay taxes, but there are a few income streams that people are unaware they may owe taxes on. Here are five of them
- Alimony. Many people survive the divorce only to get a nasty surprise at tax time. You should put a portion of each check in a savings account in order to cover the taxes.
- Unemployment benefits are taxable in all cases. While most states offer the option of having the federal taxes deducted. You also have to pay state and local taxes.
- Forgiven debt is considered income by the IRS. The creditor that forgives any portion of a debt is going to send you a 1099-C form so you can file your taxes correctly. This is crucial to know if you’re contemplating debt settlement in NC.
- Some Social Security income can be taxed. Usually, Social Security is only taxable if you have a second stream of income.
- Most people know that they have to pay taxes on lottery winnings, but did you know that you owe taxes on every form of prize winnings? Think you were lucky to win that new car or even just a hundred dollars? Wait till you get the tax bill.
Being aware of any impending tax burden is an essential part of forming your budget. Hopefully, listing these little know tax obligations will help you prepare.