Tax time is just starting, but this is no time to wait. As a job seeker, you should follow these filing tips about hidden credits to make sure you get the maximum return you deserve.
It’s now February, you’ve probably received the last of your W-2 and 1099 forms by now, and the Seahawks have finally broken our collective hearts. So now there’s no more excuses – you might as well get your taxes done now before April sneaks up on you.
If you’re a job seeker but currently employed, things probably won’t change that much compared to previous years. But if you’re currently out of work, there are a number of small ways to reduce your tax burden and get you a refund as quickly as possible.
If you were out of work in 2014 and got a new job: Remember that if you accepted unemployment benefits from the Washington State Employment Security Department (ESD), that income is fully taxable and must be reported on your return. You should have a Form 1099-G from ESD that includes this amount.
Next, be sure to deduct the eligible expenses you incurred during your job search. Some of the most common items include resume preparation costs, such as materials and/or fees for coaching; postage and other mailing fees; and agency fees for outplacement services. If you traveled to interviews or job fairs, you can deduct the transportation costs. If you drove your own car, you can use the standard business mileage rate of 56 cents per mile.
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To be eligible for these costs, however, you must itemize your deductions and search only for a job in the same field. So expenses incurred from a mid-life crisis that turns you from an accountant into a full-time lion tamer will not be deductible.
If you got a new job in a new city: This is one of the best little perks, but it has only limited utility for newcomers. You can deduct the cost of moving household goods and also the cost of a storage rental unit, if needed, on IRS Form 3903. These can be claimed regardless of whether you itemize or take the standard deduction. But this new job must be at least 50 miles away from your former home. Also, if you drive your own car, you can use the “medical or moving purposes” mileage rate of 23.5 cents per mile, which is half a cent less than the rate from 2013.
If you were laid off in 2014 and are still searching: Don’t delay in filing. Most likely you are earning less than you were while employed, so your tax bracket is also probably much lower for 2014. This means you may be eligible for a number of tax credits for working families, such as the Earned Income Tax Credit, the Child and Dependent Care Credit and the Savers Credit. For more information, see IRS Publication 4128, called Tax Impact of Job Loss.