Taxes and Job Loss

Filed in archive Information About on May 27, 2010

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When it comes to what things have to be reported on your income taxes, losing your job changes some things that you need to be aware of. New income that you may receive, such as severance pay or unemployment compensation, will have to be reported - they are taxable. The IRS recommends that you set money aside from it for taxes. Money that you received for accumulated vacation days or sick days are taxable, too.

Expenses that you get in order to find a new job could be tax deductible. So, before you start looking around, make sure that you familiarize yourself with the possible deductions and then keep good records. This should include things like travel expenses to and from interviews, contacts, fees for resume preparation, any agency fees, and more.

There may also be tax deductible expenses if you should have to move in order to get a new job. Some qualifications will apply so be sure to learn more about them from IRS Publication 521.