Unemployed, Self-Employed or Seeking a New Job? The IRS is Sympathetic

Feb. 22, 2012 - PRLog -- EGG HARBOR TOWNSHIP, N.J. – Being laid off, let go or otherwise downsized is never an easy thing, but the IRS isn’t deaf to your plight, offering many deductions and benefits for the unemployed, newly self-employed and perennial job seekers.

According to Emily K. Vu, president of TTK & Associates, an accounting firm with several offices in South Jersey, knowing what deductions you can rightfully take can help ease your tax burden when circumstances are bad.

“There are so many people who are unemployed, are searching for new positions, or – if they’re lucky – have launched home-based businesses or consultancies,” says Vu.  “It’s important to know how your situation can affect your taxes…and in most cases it’s positive.”  

Job seekers can deduct several types of search expenses, like mileage and certain other travel expenses to and from interviews.  Vu notes you can also claim fees paid to an employment agency, costs related to printing and mailing resumes, as well as laundering expenses for your interview clothes, if you itemize and the costs total over 2 percent of your adjusted gross income.

It’s important to realize that job search expenses can only be deducted if you’re looking for a position in your current profession.  Expenses incurred seeking a new career don’t qualify.

For those who have turned lemons into lemonade and have started their own business, Vu points out that those oppressive health insurance premiums are 100 percent deductible.

“If you’re an eligible self-employed or S Corporation, you can claim the premium amount on Line 29 of Form 1040,” Vu explains.  “Premiums you pay for your spouse and dependents generally qualify, as well as premiums paid for an adult child up to age 27, even if that child is no longer a dependent.”

Vu offers the following tips and advice to keep in mind when preparing your 2011 taxes:

•   If you used your car to search for a job, or your personal vehicle for business purposes, be aware the IRS has increased its mileage deduction.  You can now deduct 51 cents per mile driven from January through June, and 55.5 cents per mile for the remainder of the year. This rate applies to cars, vans, pick-ups or panel trucks.

•   If you travel out of town for interviews, you can deduct your travel expenses, but only if the main purpose of the trip was the interview or job search.  “You don’t want to claim this deduction if the trip was mostly for vacation,” Vu advises.

•   If you moved in order to take a new job, you can deduct moving expenses even if you don’t itemize on your return.  

•   Job enhancement training to get a leg up in your current career qualifies as work-related education and is therefore deductible, even if the training is not mandated by your employer.  You can deduct tuition, books and supplies, and some types of travel and transportation expenses.  However, if the training is needed to meet the minimum educational requirements of your trade or business, it is not deductible.  

•   You cannot deduct job search expenses if you are looking for a job for the first time.

•   You have until April 17 to file this year. That’s because April 15 falls on a Sunday, and the 16th is Emancipation Day, a holiday observed nowhere except Washington, D.C.  Note that if you file for a six-month extension, you still have to file by Oct. 15, however.

•   Despite a reputation for being decidedly anti-social, the IRS has gone social.  New tools this filing season include an app for iPhones and Android phones, IRS2Go, with several new features; a Twitter feed with tax announcements; and a YouTube channel with videos on tax topics in English, Spanish and American Sign Language .  The IRS also maintains four Facebook pages.

About TTK & Associates
TTK & Associates was founded by Emily K. Vu and provides a full range of accounting services that includes bookkeeping, payroll, tax planning, and tax preparation. TTK specializes in assisting individuals and business owners with tax audits and back tax problems. Its tax professionals will work with the client to resolve tax issues and fight for their right to fair treatment.  For more information on TTK & Associates, call 609-484-0005 or visit http://www.ttkassociates.com.

Resources:
IRS on YouTube:
http://www.youtube.com/user/irsvideos?blend=1&ob=0

IRS on Facebook:
http://www.facebook.com/pages/Internal-Revenue-Service/10...

IRS on Twitter: @IRSnews

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