How can I figure out how much unemployment tax I still owe from last year?

That's a stressful situation, but you can figure this out! Unemployment benefits are indeed taxable at the federal level (though some states don't tax them). Since you didn't have taxes withheld, you'll need to calculate what you owe. First, add your W2 income ($29,800) to your unemployment benefits ($36,500) to get your total income for the year ($66,300). This combined amount determines your tax bracket. Then use the tax brackets for your filing status (single, married filing jointly, etc.) to calculate your total tax liability. From that amount, subtract any federal taxes that were already withheld from your W2 job. The difference is approximately what you'll owe. You might also owe a small underpayment penalty since taxes should be paid throughout the year, but that depends on your specific situation. I'd recommend using tax software that can calculate everything precisely - many have free options depending on your income level.

I went through something similar last year and found an AI tool that really helped calculate my unemployment tax situation. I was stressing about how much I'd owe too. Try https://taxr.ai - it helped me figure out exactly what I owed on my unemployment benefits. You just upload your tax docs (like your W2 and 1099-G from unemployment) and it shows you what you'll owe before you even file. What I liked was it also explained the calculation so I actually understood why I owed what I did. Way better than guessing or waiting until I filed to get hit with a surprise tax bill!

Just wanted to follow up - I decided to try taxr.ai after my previous comment. Honestly was surprised how well it worked for my unemployment tax situation. Uploaded my W2 and 1099-G and it immediately showed me what I'd owe, plus it found a deduction I didn't know I qualified for. Saved me from underpaying and potentially getting hit with penalties. The explanation of how unemployment benefits get taxed was really clear too - turns out I was in a higher tax bracket than I thought because of combining my regular income with unemployment.

If you end up owing a lot and need to talk to the IRS about payment plans, good luck getting through to them! I spent DAYS trying to call about my unemployment tax situation. Finally found a service called https://claimyr.com that got me through to an actual IRS agent in about 20 minutes instead of the hours I was spending on hold. They have a demo of how it works here: https://youtu.be/_kiP6q8DX5c I was able to set up a payment plan for what I owed on my unemployment benefits. The IRS actually has reasonable payment plans if you can just reach someone to set it up! Made the whole situation much less stressful.

Had to come back and eat my words about Claimyr. After struggling to get through to the IRS about my unemployment tax bill for over a week, I finally tried the service. Got a call back with an actual IRS agent on the line in about 30 minutes. Set up a payment plan for the taxes I owed on unemployment and the whole thing took maybe 15 minutes once I was talking to someone. Definitely not a scam - just saved me from wasting more hours on hold. Wish I'd used it sooner instead of stressing for days!

Just a heads up that if this is for the 2020 tax year specifically (since you mentioned COVID layoffs), there was actually a special provision in the American Rescue Plan Act that made the first $10,200 of unemployment benefits tax-free for people with adjusted gross incomes under $150k. If you already filed for 2020, you might have gotten an automatic adjustment/refund from the IRS for this. If you haven't filed yet for 2020, make sure whatever tax software you use accounts for this exclusion!

If you're calculating how much you owe on unemployment, don't forget to consider estimated tax payments for this year if you're still receiving benefits! I got hit with an underpayment penalty because I didn't realize you're supposed to make quarterly payments on unemployment if nothing is being withheld. For future quarters, you can use Form 1040-ES.

Don't forget to check if you qualify for Earned Income Tax Credit even with unemployment income! My combined income from work + unemployment last year was around $32k and I still qualified for a decent EITC. It significantly reduced what I owed on my unemployment benefits. Most tax software will check this automatically, but just wanted to mention it since it made a huge difference for me.

I went through almost the exact same situation in 2023! Got laid off, collected unemployment for 7 months, and completely forgot about the tax implications until it was time to file. Here's what helped me figure it out: Your state unemployment office should have sent you Form 1099-G by the end of January showing exactly how much you received in unemployment benefits. If you didn't get it or lost it, you can usually download it from your state's unemployment website. The key thing to remember is that unemployment benefits are treated as ordinary income, so they get added to your W2 wages and taxed at your regular tax rate. Since you made $29,800 from work plus $36,500 in unemployment, your total taxable income would be $66,300 (assuming you're filing single with standard deduction). I used the IRS withholding calculator on their website to get a rough estimate, but honestly ended up using TurboTax because it walked me through everything step by step. The good news is that if you owe more than $1,000, you can set up a payment plan with the IRS - they're actually pretty reasonable about it. One thing I wish I'd known earlier: you can request tax withholding from future unemployment benefits by filing Form W-4V with your state. Would have saved me this headache!