What happens if you don't withhold taxes on unemployment Washington ESD benefits?

Thank you for the info! Do you know roughly what percentage I should expect to owe? I'm trying to figure out how much I need to set aside.

It depends on your total income for the year, but generally you're looking at around 10-22% for federal taxes plus Washington state doesn't have income tax so you're lucky there. I'd recommend setting aside at least 15-20% of your remaining benefits to be safe.

Ouch! That's exactly what I'm afraid of. How did you handle paying that much at once?

had to set up a payment plan with the IRS. wasnt too bad actually, they were pretty reasonable about it

That sounds really helpful! I've been trying to call Washington ESD for days to update my withholding but can never get through.

Never heard of that service before but if it helps get through to Washington ESD then it might be worth checking out. The phone system there is absolutely terrible.

Unfortunately unemployment benefits have been taxable since they started. It's a common misconception though. You'll want to start withholding immediately and maybe set aside some money for what you've already received.

Well this is just great. Another thing to stress about. Thanks for letting me know though, better to find out now than in April.

I found the section in my account but it's not letting me update it. Says I need to call to make changes. That's why I'm stuck trying to get through to someone.

That's frustrating. Sometimes the online system has glitches. Keep trying to call or maybe try the virtual assistant first to see if they can help with simple updates.

That's somewhat reassuring to hear. Did he have to pay any penalties or interest?

He did have to pay some interest on the payment plan but it wasn't too bad. I think it was like 3% or something. Way better than trying to come up with $1,800 all at once.

I understand the frustration, but the tax obligation is clearly stated when you file for benefits. The option to withhold is right there in the application process.

Yeah but when you're desperate for money and worried about paying rent, tax withholding isn't exactly the first thing on your mind!

That's exactly why I ended up using Claimyr. I was spending hours every day trying to get through and getting nowhere. At least with their service I got connected to an actual person who could help.

I might have to look into that. This is ridiculous how hard it is to reach them for something this basic.

I tried that but still couldn't get through. Maybe I need to try multiple days in a row?

Yeah, it took me about 4 days of trying first thing in the morning before I got through. It's definitely a numbers game.

Good point about keeping track. I should probably start documenting all my payments now so I have everything organized.

Exactly. And if there's any discrepancy between what you received and what the 1099-G shows, you'll need to contact Washington ESD to get it corrected.

Start setting aside money now if you can. Even if it's just $50-100 from each payment, it'll help reduce the shock when tax season comes.

yeah good idea. better late than never i guess

That's a good strategy if you have the discipline for it. I don't trust myself to not spend the money though!

Yeah, it's definitely not for everyone. You have to treat that tax money as completely off-limits or you'll get in trouble.

I used it and it worked great for me. Got connected to a Washington ESD agent within about 30 minutes instead of spending all day trying to call. Worth checking out their demo video to see how it works.

Thanks, I'll definitely look into it. At this point I'm willing to try anything to get through to them.

No, withholding only applies to future payments. You'll still owe taxes on everything you've already received. You'll need to either set aside money separately or make estimated tax payments to avoid penalties.

Got it, that makes sense. Guess I better start calculating how much I owe on the payments I've already gotten.

That's my worst fear right there. I definitely don't want to have to borrow money to pay taxes.

Yeah it was pretty embarrassing having to ask for help at my age. Just don't make the same mistake I did.

That's somewhat comforting to know there are options. Hopefully I can get my withholding set up soon and minimize the damage.

Yeah, and if you do end up owing, file your return on time even if you can't pay the full amount. The penalties are much worse if you don't file.

You're absolutely right. I wish I had thought about it more carefully when I first applied.

Live and learn. At least you're thinking about it now instead of being surprised in April.

That sounds like a solid plan. Good luck getting through to them!

Hope you get it sorted out soon. Feel free to update us on how the Claimyr service works if you end up trying it.