Tax Deductions for the Unemployed

Tax Deductions for the Unemployed

Slide1It’s a sad truth but one we must face—a large number of young adults are finding themselves without jobs. Many of these individuals are recent college or high school graduates, young people looking to change careers, or people forced to relocate for one reason or another. Unemployment is one of the most stressful life events a person can face, and it is often extremely detrimental to finances. Fortunately, there are a few things you can do come tax time to help yourself out.

First, make sure you’re searching for a job within your field and that you’ve been employed before. This will mean you are eligible for job search deductions on your taxes. Next, prepare your resume. If you hire someone to do it, this is a deductible expense. Postage and envelopes used for resume sending can also be written off, as can the cost of using a fax machine. Phone calls can be reimbursed, as can employment agency fees (assuming your employer does not pay you back for them.

Driving somewhere for an interview? Mileage, whether or not you secure the job, can be deducted and can save you some money if you’re traveling to other cities or states for an interview. At a rate of 56.5 cents per mile, even the small trips add up. Similarly, keep track of your other travel expenses. If you’re traveling for a job search, airfare and lodging can be written off, assuming the trip is more job search than leisure.

Should the job search in your area prove unfruitful, consider moving—you can deduct moving costs if your new workplace is at least 50 miles farther from your old home and you relocate. You’re then obligated to log 39 weeks at your new place of employment. These moving expenses might include 24 cents to the mile in a car, plane tickets and lodging, cost of packing and shipping items to your new home, 30 days of storage, and car and pet shipping costs—but be sure to continue the job search.

Do keep in mind that you can only deduct the job search expenses and other miscellaneous costs (like employee expenses, tax prep fees, investment fees, etc) that exceed 2% of your adjusted gross income.

To be sure you’re able to recoup as much money during your difficult time as possible, make sure you’re keeping receipts and accurate records of all your expenses. Spend some time learning more about ways you might make money at home through work or investments too—Jason Hartman recommends a diversified portfolio based in income property investments to insure difficult times become and remain a thing of the past.(http://www.flickr.com/photos/andjohan/5644714850/)

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