Washington ESD - are unemployment checks taxed when filing returns?

Oh no, I was afraid of that. Do you know when Washington ESD sends out the 1099-G forms? I haven't gotten mine yet.

They usually mail them out by the end of January. You can also access it online through your SecureAccess Washington account if you need it sooner.

Ugh that's exactly what I'm worried about. How much did you collect total if you don't mind me asking? Trying to estimate what I might owe.

About $15,000 total. The tax hit was roughly 15% of what I collected, but your rate might be different depending on your other income.

You can also have taxes withheld from future unemployment payments if you're still collecting. There's an option when you file your weekly claim.

How much does something like that cost? I'm already stretched thin financially.

It's worth checking out their site for pricing, but honestly the time I saved not sitting on hold for hours was worth it for me. Plus I actually got my questions answered.

I don't remember seeing that option when I file my weekly claims. Is it on a specific page?

It's usually near the end of the weekly claim process, right before you submit. Look for something about 'federal income tax withholding' - it's easy to miss.

Yeah I missed it too for the first few months. Had to call Washington ESD to get it set up retroactively, which was a nightmare to get through to them.

Wait, what are FICA taxes? I thought unemployment was just taxed like regular income.

FICA is Social Security and Medicare taxes - normally 7.65% of your paycheck. The good news is unemployment benefits aren't subject to FICA, so you don't owe those taxes on your UI payments.

I understand the frustration, but the withholding is optional because some people prefer to get the full amount and handle taxes themselves. The information about taxability is supposed to be provided when you first apply.

supposed to be provided but who actually reads all that fine print when you're desperate for income? they should make it opt-out instead of opt-in

I agree it should be more prominent. A lot of people don't realize unemployment is taxable income until it's too late.

Really? That actually worked for you? I've been trying to call for weeks about this exact issue.

Yeah, I was skeptical too but it really did work. The agent was able to pull up my account and make the change right away. Check out their demo video if you want to see how it works.

What kind of job search expenses are deductible? I've spent money on resume services and interview clothes.

Unfortunately a lot of job search expenses aren't deductible anymore under current tax law, but it's worth talking to a tax professional about your specific situation.

How hard was it to set up the payment plan? I'm definitely going to need to do that too.

Not too bad actually. You can do it online when you file your return or call the IRS. They have different options depending on how much you owe and your financial situation.

How would you even check if the amount is wrong? I don't keep detailed records of every payment.

You can log into your Washington ESD account and look at your payment history. It should show all the payments you received throughout the year.

I did work part-time for a few months while collecting. Does that make the tax situation worse?

Not necessarily worse, but it can push you into a higher tax bracket since all the income is combined. Definitely worth having a professional look at it.

Smart move. I wish I had thought ahead like that instead of scrambling now.

Yeah, I learned from a friend's mistake the year before. She got hit with a $4000 tax bill and had to take out a loan to pay it.

I never thought about that. I was collecting $1053 per week for most of the year, which is more than I made at some of my previous jobs.

Exactly - that's over $50k annually if you collected for a full year. Definitely going to affect your tax bracket compared to lower-income years.

I tried that but got confused because unemployment doesn't have the same withholdings as regular paychecks. Ended up just using the general rule of thumb to set aside 20-25%.

Yeah, that's probably the safer approach. Better to overestimate than underestimate with taxes.

How do you make estimated tax payments? Is that something you do quarterly?

Yes, quarterly payments to the IRS. You can do it online or mail in payment vouchers. Your tax preparer can help you figure out how much to pay.

Thanks for the update! I think I'm going to try that service since I can't get through on my own. Did they help with anything else?

The agent also helped me update my direct deposit information and explained how to access my 1099-G online when it's available. Much more helpful than the automated system.