Will the IRS find out I receive Unemployment benefits if I report recent wages to a part time I currently have?
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I currently am receiving unemployment benefits, when asked if I wanted federal tax withheld (10%) in the beginning of my claim I said no. Additionally to unemployment benefits I have a job on the side for babysitting On the books by the government that l never reported to unemployment. Ive had this babysitting job for two years now. My worry is If I claim the wages for my babysitting job from my w2 form will the fact that I receive unemployment come up in the system and will i get in trouble. Remember I am not putting unemployment tax withheld because I didnt have any deducted from my benefits. I would just be putting my w-2 of the babysitting job.
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Answer:
Don't lie to the IRS, especially about something as easy to uncover as unemployment benefits. When they receive individual tax forms they run them through their computers which matches the W-2's, 1099's, etc, from employers and states with the figures you put on your form. It's going to error out because you didn't report everything and the computer will generate an automatic letter to you saying you owe them money. It's not like you have a chance of getting away with this. Because the process is automated, they will immediately know your form is incorrect.
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Other answers
If you don't report a W-2 on your tax return, there's 100% chance you'll get caught. If you don't report your income to unemployment while you are collecting, there's a large chance you'll get caught and have to pay back the benefits you got illegally - and if you are lucky, you won't be prosecuted for fraud.
Judy
The IRS will find out you get UI, period. The state will report that fact directly to IRS and send you a Form 1099-G for those benefits. Unemployment is taxable income.
rotflol
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