Washington ESD unemployment benefits federal tax rate - need to know for filing

So if my regular tax bracket is 22%, then the unemployment gets taxed at 22% too? That seems like a lot on top of already being unemployed.

Yes, that's correct. It's treated just like wages for tax purposes. Many people don't realize this and get surprised at tax time.

I wish I had known this earlier! Is it too late to set up withholding now? I'm still receiving benefits.

You can change your withholding election anytime by logging into your eServices account on the Washington ESD website. Just look for the tax withholding option in your claim settings.

How much does that cost? I'm already tight on money from being unemployed.

They focus on helping you get through to an actual person instead of sitting on hold forever. Worth checking out their site for the details - helped me resolve a 1099-G discrepancy that would have been a nightmare to fix otherwise.

I understand the frustration, but unemployment insurance is funded by employer taxes, not employee contributions. The benefits are considered taxable income because they replace wages.

still feels like double taxation to me but whatever. just another way the system screws over working people

Can you deduct job search expenses even if you're on unemployment? I've been spending money on gas driving to interviews and new work clothes.

Some job search expenses can be deductible, but the rules changed a few years ago. You'd need to check current IRS guidelines or talk to a tax professional about your specific situation.

Ouch, that's exactly what I'm worried about. Did you try to negotiate with the IRS at all?

Yeah, I set up a payment plan but still had to pay interest and penalties. Much better to just have it withheld upfront.

All unemployment benefits are taxable income, regardless of the amount. However, you might not owe taxes overall if your total income for the year is below the standard deduction threshold.

Ok that makes sense. I only got like $800 total so probably won't matter much in my case.

That's actually a relief! At least I don't have to deal with state taxes on top of federal.

Exactly! Makes the tax situation a bit simpler even though the federal taxes still sting.

I did some Uber driving while on unemployment. I reported it in my weekly claims but wasn't sure if that affects my taxes differently.

The Uber income is separate from your UI benefits for tax purposes - you'll get a 1099 from Uber and your 1099-G from Washington ESD. Both are taxable but reported separately.

Most tax software handles unemployment income fine. Just make sure you have your 1099-G handy and enter it exactly as shown. The software will calculate everything automatically.

Thanks! I was worried I'd need to hire someone but sounds like the software should work.

Did you have to give them your personal info to use the service?

The service is pretty straightforward to use. Check out their demo video to see exactly how it works - that's what convinced me to try it.

Don't panic! The amount you'll owe depends on your total income and tax situation. Run the numbers through tax software or talk to a tax preparer to see what you're looking at.

Ok I'll try some online calculators to get an estimate. This is stressing me out though.

I'm definitely going to set that up today. Better to have too much withheld than owe a huge amount.

Exactly! You can always get a refund if they withhold too much, but owing money you don't have is much worse.

Yes, credits like the child tax credit can help reduce your overall tax liability. But the unemployment income is still taxable - credits just reduce what you owe after everything is calculated.

Got it, so it helps but doesn't eliminate the unemployment tax completely. Thanks for clarifying.

Both should arrive by January 31st typically. Washington ESD usually mails 1099-G forms in late January, and employers must provide W-2s by the same deadline.

Perfect, I'll wait until early February to file then. Don't want to miss anything important.

There aren't special tax breaks specifically for being unemployed, but you may qualify for other credits based on your income level, like the Earned Income Tax Credit if you worked part of the year.

I'll look into that. Every little bit helps when money is tight.

Absolutely do NOT try to hide unemployment income. The IRS receives copies of all 1099-G forms, so they know exactly what you received. Not reporting it is tax fraud and will result in penalties and interest.

That's what I figured. I'll make sure to tell my brother he's giving bad advice.

I might try them if I have issues with my 1099-G. The regular phone line is always busy when I try to call.

Yeah, that's exactly why I used them. Actually got to talk to a real person instead of just getting hung up on or stuck in phone tree hell.

I didn't even think about that. I contributed to my Roth IRA while unemployed using some of my benefit money.

You should be fine with Roth contributions since those are made with after-tax dollars anyway. But definitely worth double-checking with a tax professional if you have a complex situation.