How to file taxes with Washington ESD unemployment benefits - need guidance

Oh no, I was worried about that. Do you know roughly what percentage I should expect to owe?

It depends on your total income and tax bracket, but unemployment is taxed as ordinary income. If you're in the 12% bracket, expect to owe around 12% plus any state taxes if applicable.

That's pretty close to what I received. Did you have to pay any penalties for not having taxes withheld?

No penalties if you file on time and pay what you owe. The IRS doesn't penalize you for not having withholding on unemployment as long as you report it correctly.

That's interesting, I haven't heard of that service before. Did it actually work for you?

Yeah it worked great. I needed to verify some dates on my 1099-G and couldn't get through the normal way. They got me connected to an ESD agent within like 20 minutes.

Hmm, sounds too good to be true. How much does something like that cost?

That was only for 2020 tax year - there was a $10,200 exclusion for unemployment benefits. That doesn't apply to 2024 benefits though.

Ugh, ok that makes sense. I was hoping maybe it was still a thing.

True, that's something at least. Still stressing about the federal taxes though.

Yeah but don't forget about FICA taxes if you're also working. The unemployment doesn't have FICA withheld but your regular job income does.

Check your 1099-G form - it should show both the total benefits paid and any federal taxes withheld. If taxes were withheld, it'll be in box 4 of the form.

Perfect, I'll check that when I get home. Hopefully I was smart enough to set up withholding.

Yes, any unemployment benefits need to be reported regardless of the amount. You should still get a 1099-G from Washington ESD even for shorter periods.

Ok thanks, I wasn't sure if there was like a minimum threshold or something.

That's smart. I wish I had thought of that when I was filing my weekly claims.

How do you set up the withholding? Is it something you do when you first file or can you change it later?

You can change it anytime by logging into your ESD account and updating your withholding preferences. It's under account settings.

Job search expenses used to be deductible but that changed with the tax law updates. For 2024 taxes, those expenses generally aren't deductible anymore unless you're self-employed.

Bummer, that would have helped offset some of the tax bill from the unemployment benefits.

It's actually not that complicated. You'll just have your W-2 from your employer for December and the 1099-G from Washington ESD for your unemployment. Just report both sources of income.

Ok that doesn't sound too bad. I was imagining it would be way more complex.

I'm definitely going to look into that if I need to contact ESD about my 1099-G. The regular phone system is impossible.

Wait what's this claimyr thing? I've never heard of it.

It's a service that calls Washington ESD for you and gets you connected to an agent. Check out claimyr.com - they have a demo video that explains how it works.

Good to know, I was planning to use TurboTax this year anyway.

Yeah most tax software handles unemployment benefits automatically. Just make sure you enter the 1099-G exactly as it appears on the form.

They're usually mailed by January 31st. If you don't receive it by early February, you can request a duplicate through your ESD online account or by calling them.

Ok I'll give it another week or two. Hopefully it just got delayed in the mail.

Same here! I feel much better about tackling my taxes now.

Glad we could help. Just remember to report all your unemployment income and you'll be fine.

That's really good to know. I was worried about what would happen if I couldn't pay everything immediately.

Yeah they're usually pretty reasonable about payment plans as long as you communicate with them and don't just ignore the bill.