Always consult a tax advisor for the rules as they pertain to your situation and/or visit the IRS online at http://www.IRS.gov 1-800-829-1040 is their toll free help number to free advice.
Did you know that you MAY be able to deduct some of your job hunting expenses. This includes such things as career counseling and travel expenses, printing and postage, as well as phone calls. While these are called miscellaneous itemized deductions, they are only going to be deductible if-combined with other miscellaneous itemized deductions-exceed 2% of your AGI. Here are a couple of other things that apply-they have to be for a job search within your current occupation, they can't be for your first job search, and there can not have been a "substantial" time that has passed between losing your old job and when you begin looking for the new one.
If you must move/relocate for a new job, your moving costs to ship your stuff may well be deductible too. If you receive a relo package with money from the new employer, this amount will of course offset any deduction.
DON'T forget-unemployment IS taxable as income. Some people forget and don't have any taxes withheld. Then, at tax time, find they owe quite a bit of money. Don't let that be you!
Lastly, taking money from a qualified plan or IRA may allow you qualify for certain hardship provisions that would still make the income taxable, but without the 10% penalty. For example if you are over 55 and have a 401K, and have been laid off, you will qualify for avoiding the 10% penalty. |
