How to calculate unemployment tax - Washington ESD questions

So I'll get a 1099-G automatically? Do I need to request it or will Washington ESD send it to me?

Washington ESD will mail it to you by the end of January for the previous tax year. You can also access it through your SecureAccess Washington account online.

I wish I had known about this option earlier! Is it too late to start having taxes withheld now?

No, you can change your withholding preference anytime by updating your weekly claim filing. Just look for the tax withholding option when you submit your next weekly claim.

This is really helpful. I've been setting aside money manually but having it automatically withheld would be easier.

How much does something like that cost? I've been trying to call Washington ESD for weeks about my 1099-G.

It's worth checking out their site for details, but for me it was totally worth it to actually talk to someone at Washington ESD instead of getting hung up on constantly.

That's a good point. I made about $45K before I got laid off in November, so I'll need to factor that in too.

Exactly right. Your unemployment benefits get added to your other income, so if you were already close to a higher tax bracket, the UI benefits could push you over.

So roughly $1,500-$2,800 in taxes on that unemployment income? That's more than I expected.

That's a rough estimate. Your actual rate depends on your total income, deductions, filing status, etc. Definitely consider having that 10% withheld to avoid a surprise at tax time.

This is why I always tell people to treat unemployment like a regular paycheck when it comes to taxes. Set aside at least 20% if you're not having it withheld.

You're correct! Washington state has no personal income tax, so you only pay federal taxes on your unemployment benefits. That's actually a benefit compared to other states.

Oh that's a relief! So it's just the federal tax I need to worry about calculating.

Good to know. I haven't been having anything withheld so far, so whatever the 1099-G shows will be the full taxable amount for me.

Yeah, in that case you'll want to make sure you have enough saved to cover the tax bill. I learned this the hard way a few years ago.

I've been doing some freelance work and reporting it to Washington ESD. Do I need to pay quarterly taxes on that income?

If you're making significant income from freelance work, you might need to make estimated quarterly payments to avoid penalties. Check with a tax professional about your specific situation.

Good point. The IRS Free File program is available for people with adjusted gross income under $73,000. Perfect for someone in OP's situation.

I might need to try that. I've been trying to get clarification on some of my benefit dates for tax purposes and can't get through to anyone at Washington ESD.

Same here. The phone system is impossible. I'll check out that video demo you mentioned.

That's helpful. I'm single so I think my standard deduction is around $13,850 for 2024?

Yes, that's correct for 2024. So if your total income including unemployment is close to that amount, you might not owe much in federal taxes.

How do I know if I need to make estimated payments? This is all pretty overwhelming.

Generally if you expect to owe $1,000 or more in taxes after withholding and credits. Since you're getting unemployment now, consider having the 10% withheld to stay safe.

It really depends on your total income for the year and what was withheld from any W-2 jobs you had. The unemployment benefits will definitely increase what you owe compared to if you hadn't received them.

guess ill just have to wait and see what happens when i do my taxes next year

Ouch, that's a big chunk. Did you have to set up a payment plan with the IRS?

Yeah, I did a payment plan. It wasn't too bad, but definitely would have been easier to just have it withheld automatically.

Is that complicated to do? I've never made estimated payments before.

Not really complicated, but having Washington ESD withhold 10% is probably easier if you're not used to handling estimated payments.

This is really important advice. I see too many people get surprised by tax bills because they didn't plan ahead.

Yeah, I'm definitely going to start having the 10% withheld and maybe set aside a little extra just to be safe.

I think I'm going to try that. I have a few other questions about my claim too and the phone system is just impossible.

Let us know how it goes! I've been thinking about trying it myself.

What's the filing requirement for someone like me who's single?

For 2024, if you're single and under 65, you need to file if your gross income is $13,850 or more. Your unemployment benefits count toward that total.

Thanks everyone for all the helpful information. I'm going to change my withholding settings on my next weekly claim and start planning for tax season.

Smart move. Better to be prepared than surprised by a big tax bill next year.

That's really good advice! I hadn't thought about that scenario. If I do find a job later this year, should I ask HR to withhold an extra amount or is there a specific way to calculate how much extra I'd need?