Unemployment insurance question

[tpzelda]

Hi all,

I have been laid off from my job a few months ago. I took some time
off from work and now I am slowly getting back to job search. I was
informed that I am eligible for unemployment insurance. My husband
works and makes good money, i.e. we don't really need the money. My
adviser tells me it is OK since the money is supposed to come back
from my previous employer when I was working. We feel a little uneasy
about collecting the money. Should I just take it as a benefit that I
earned while I was working or should I not get it? I mean am I
preventing someone else who might me in more need? What are the things
that can help me decide what to do? Thanks.

 

[joetaxpayer]

Hi all,

I have been laid off from my job a few months ago. I took some time
off from work and now I am slowly getting back to job search. I was
informed that I am eligible for unemployment insurance. My husband
works and makes good money, i.e. we don't really need the money. My
adviser tells me it is OK since the money is supposed to come back
from my previous employer when I was working. We feel a little uneasy
about collecting the money. Should I just take it as a benefit that I
earned while I was working or should I not get it? I mean am I
preventing someone else who might me in more need? What are the things
that can help me decide what to do? Thanks.

No one is forcing you. If you are entitled to it, it's yours. Kinda like
the people who claim they'll never file to get their social security
benefits. If you feel strongly, don't bother claiming it, and enjoy the
good feeling. A compromise is to take the money and donate it to your
favorite charity.
Joe

 

[PeterL]

Hi all,

I have been laid off from my job a few months ago. I took some time
off from work and now I am slowly getting back to job search. I was
informed that I am eligible for unemployment insurance. My husband
works and makes good money, i.e. we don't really need the money. My
adviser tells me it is OK since the money is supposed to come back
from my previous employer when I was working. We feel a little uneasy
about collecting the money. Should I just take it as a benefit that I
earned while I was working or should I not get it? I mean am I
preventing someone else who might me in more need? What are the things
that can help me decide what to do? Thanks.

It's a benefit you earned while working. You are not preventing
someone else from getting this insurance should you claim it.

 

[Harlan Lunsford]

Hi all,

I have been laid off from my job a few months ago. I took some time
off from work and now I am slowly getting back to job search. I was
informed that I am eligible for unemployment insurance. My husband
works and makes good money, i.e. we don't really need the money. My
adviser tells me it is OK since the money is supposed to come back
from my previous employer when I was working. We feel a little uneasy
about collecting the money. Should I just take it as a benefit that I
earned while I was working or should I not get it? I mean am I
preventing someone else who might me in more need? What are the things
that can help me decide what to do? Thanks.

So many people would just take the money and run. In fact, they would
take it, and not even consider or remember or KNOW that it is subject to
income tax. If your tax bracket is 28% federal, you can see now that
you'll net only 72%, unless your state also taxes it; and some do.

So then, if you don't really need it, why not take it anyway, and donate
to the tax deductible charity of your choice? In that way your state
will be helping your charity fulfil their mission.

ChEAr$,
Harlan Lunsford, EA n LA

 

[removeps-groups]

So then, if you don't really need it, why not take it anyway, and donate
to the tax deductible charity of your choice? In that way your state
will be helping your charity fulfil their mission.

If they donate to a tax deductible charity they get a deduction for it
too, so in that case they can donate more than what they receive in
order to truly even out -- like on 12k unemployment you could donate
12k/.75=16k, assuming you are in the 25% tax bracket (ie. deduction is
25% of 16k = 4k). But one would have to run the numbers through a
computer program to see the effective on standard deduction, phaseout,
state tax, etc.

 

[Mark Bole]

On May 23, 2:27 pm, Harlan Lunsford <[email protected]> wrote:

If they donate to a tax deductible charity they get a deduction for it
too, so in that case they can donate more than what they receive in
order to truly even out -- like on 12k unemployment you could donate
12k/.75=16k, assuming you are in the 25% tax bracket (ie. deduction is
25% of 16k = 4k).

But you are ignoring the part of Harlan's message where he pointed out
that you pay federal tax on the U.I. -- so the charitable deduction, if
any, only cancels that out.

-Mark Bole

 

[Mark Bole]

Hi all,

I have been laid off from my job a few months ago. I took some time
off from work and now I am slowly getting back to job search. I was
informed that I am eligible for unemployment insurance. My husband
works and makes good money, i.e. we don't really need the money. My
adviser tells me it is OK since the money is supposed to come back
from my previous employer when I was working. We feel a little uneasy
about collecting the money.

I don't know what state you live in, but it might not be as much of a
windfall as you think. For example, if you are not available for work
for any reason, which includes illness or being out of town, you
probably won't qualify for that period of time. Of course, you also
have to be actively looking for work and not refusing work, in other
words there are definitely strings attached.

If the source of your unease is social stigma, don't worry, plenty of
people who are (were) well-paid have no qualms about taking U.I. I
can't really think of any other reason not to take it, as others have
pointed out you can always do whatever self-less (or selfish) thing you
want with the money (after tax, of course).

-Mark Bole

 

[Paul Thomas]

I mean am I preventing someone else who might me in more need?

No. Take the money you are eligible for.

No one is lacking because of your one claim.

 

[Seth]

I was
informed that I am eligible for unemployment insurance. My husband
works and makes good money, i.e. we don't really need the money. My
adviser tells me it is OK since the money is supposed to come back
from my previous employer when I was working.

Is there "constructive receipt" so that she'd be taxed on the money
even if she chooses not to take it?

Seth

 

[Mark Bole]

Is there "constructive receipt" so that she'd be taxed on the money
even if she chooses not to take it?

No. Constructive receipt has to do with exactly *when* you recognize
money that actually belongs to you, not whether or not you were entitled
to it in the first place. There is no requirement to receive U.I., nor
is there such a thing as "imputed" U.I.

In fact, it would be a no-brainer to disqualify yourself from receiving
U.I., just state that you were not looking for work.

-Mark Bole

 

[removeps-groups]

But you are ignoring the part of Harlan's message where he pointed out
that you pay federal tax on the U.I. -- so the charitable deduction, if
any, only cancels that out.

Yeah, good point, I thought of this after posting. If your state does
not tax unemployment compensation but you do manage to get a deduction
for charitable contributions, then in that case I suppose you can
donate more.