It looks like we owe significantly less in back unemployment taxes than initially suspected.
The state only goes back three years, and it gave me a very low rate (2%), so I owed a whopping $420. Since I got the reports back to them within a month, they waived penalties and interest too.
Unfortunately, the other four years (2011 to 2014) created quite a headache on the federal front.
The federal unemployment tax (FUTA) form takes into account what you paid on your state taxes, and having dead years (as they’re apparently called) is not covered in the instructions.
I consulted the IRS, which would only tell me to follow the instructions to the letter. Which didn’t help since the wording didn’t cover my situation.
In the end, there were two ways to interpret how the form’s wording applied to my case. One would have me owe $1,900 after interest; the other would see me owe about $350.
I consulted an H&R Block agent who said that it should be the $350 version. When I was skeptical (because we don’t have that kind of good luck) she called the IRS to try to get a firm answer. Unfortunately, she was given the same “follow the instructions exactly as they’re written” advice. Helpful.
I then called the state unemployment office to see if they had any input. They were about as clueless as I was, but they agreed that the closest match was the interpretation that had me owing $350.
I’m still pretty anxious because I don’t trust good financial luck like this. But I’ve done about as much due diligence as is possible. So I’m going to just mail in the forms and try not to let anxiety run too rampant.
There’s still the matter of about $1,300 in penalties. I’ll be petitioning to have them waived. Apparently, the IRS is pretty reasonable in this regard, and I assume my bringing this to them will help my case. But if not… Well, I owe it, so I’ll pay it.
Now if you’ll excuse me, I exerted myself too much on St. Patrick’s Day and wound up exhausted and riddled by a head cold. So I’m going to go lie down and try not to obsess over taxes.