Tax Tips for Changing Times

Looking for a Job? Tax Breaks Just for You.

If you’re looking for a job, the IRS is on your side. Uncle Sam prefers you to be employed. You can deduct many of you job-hunting costs including the costs of resumes, including printing and mailing costs, long distance calls and travel costs for your interviews.

Collecting Unemployment?

This is the good news/bad news department. If you’re collecting unemployment benefits as compensation for lost wages, those benefits count as taxable income, and, yes, you will owe federal tax on them. Form W-4V is the one to use.

Getting Paid With Tips?

Be careful about Allocated Tips. On Form W-2, in Box 8, there will be an amount shown called Allocated Tips. This amount is generated from a government formula and is in addition to the tips you have already reported to your employer. If the amount of your Allocated Tips doesn’t match your records, you must prove your case with written records

Furnishing Your Home Office?

If you purchased office furniture for your home office, you can deduct it as an expense only if you use it for business 100% of the time. So, take your nap in the non-deductible space and not at your desk. If you qualify and want to deduct the entire cost in year of purchase, utilize the section 179 expense deduction.

Like the Freedom of Being Self-Employed?

Self-employment income should be reported on Schedule C. Your expenses also go there. Note that your net profits are subject to self-employment tax as well as income tax (so much for the glamour of the entrepreneur). You may also be required to file quarterly estimated tax. When paying estimated tax, you can be up to $1,000 low in your estimates without incurring a penalty. However, whatever you owe will have to be paid in full when you file.

General Reminder:

You can’t deduct any expenses that you’re reimbursed for.

These articles provide general information on tax, accounting, and financial topics for small businesses and individuals. They are educational in nature and are not specific legal, accounting, financial, tax, or other professional advice, and should not be relied upon as such. This content was prepared by Service2Client and may have been reviewed or edited by the website owner for accuracy and compliance. Look for a trust mark below for verification details. No representation is made that any approach described will achieve a particular result, and no regulatory or professional body has reviewed or endorsed this content. Because each situation is different, readers should consult a qualified professional about their specific circumstances before acting. Images accompanying these articles are protected by copyright and may not be copied or reused.

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