Last-minute tax tips for job seekers -- Career Center Blog

April 10, 2010

Last-minute tax tips for job seekers

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By Randy Woods
NWjobs

If you're like me, you're looking at the calendar for next week and marveling at how quickly April 15th has sneaked up on you. Because this is the last weekend to go through your W-2s, 1099s and Form 1040s, here are a few last-minute reminders about some new credits and often-overlooked deductions for job seekers that may help give a much-needed boost to your return.

Some job search expenses are tax-deductible. If you've been looking for work within the same field during 2009, and you have a track record of working in that industry in the past, you can deduct certain expenses, provided you itemize on your return. Covered expenses include uncompensated headhunting or outplacement fees, legal fees, phone calls to potential employers, resume preparation and mailing costs, travel expenses (including car trips at 55 cents per mile) taken to and from interviews, and membership fees for certain networking organizations. The full list can be found online under Publication 529 regarding "miscellaneous" deductions.

Education credits and deductions. Have you taken a training course to boost your skills within your chosen field in 2009? Through the Tuition and Fees Tax Deduction, the cost of enrollment, course-related books, supplies and equipment (up to $4,000) can be deducted, provided your annual income is below $80,000. This year, as part of the American Recovery and Reinvestment Act, you may be eligible for the American Opportunity Credit of up to $2,500 for education-related expenses--even for those who owed no tax in 2009. These are both terrific options for job seekers, but you can only choose one of these benefits in the same year. Visit the IRS's tax benefits for education page for more details.

One-time unemployment compensation benefit. I almost forgot about this until I gathered my own 1099s this week. Usually, unemployment benefits are regarded as 100 percent taxable income. However, because of the economic downturn, the IRS is providing a one-time exemption for the first $2,400 in unemployment compensation received in 2009. Take advantage of this now because all 2010 dole checks will go back to being fully taxable.

Don't forget the Earned Income Tax Credit (EITC). You may never before have considered this often-overlooked benefit for low-income filers, but many who have been out of work for long periods of time may find that they are now eligible. The amount you may receive is calculated based on income, filing status and the size of your family. Check out the online EITC Assistant tool for information about eligibility.

For more information about various forms or publications, visit IRS.gov or call 800-TAX-FORM (800-829-3676). Best of luck on those forms!

Randy Woods writes about job-search tools, networking techniques and other tips to help you land your dream job.