Quick Tax Tips

Over the next couple weeks I am going to use the blog to highlight some quickie tax tips as we approach year end so make sure you are checking in every Friday!

This is a great time to maximize tax planning with year-end adjustments. It is also a great time to strategize and coincidentally we are having a discount on tax strategy meetings to make sure your 2011 return is tuned up and you are paying the least amount of tax. Too many taxpayers miss deductions that are legally allowed because they don’t plan properly. Give my office a call to schedule a meeting at this discounted rate.

Ok so today I want to discuss an issue that has come up a lot in my practice of late….new job searches and the moving expense deduction. Individual taxpayers seeking new jobs may incur a variety of expenses, including costs directly associated with moving to a new job location or those specifically related to the job search. Many of these expenses are deductible, but the rules are strict, and expenses must be carefully documented and substantiated. You may be able to take advantage of these deductions, if you plan carefully. Any moving expenses you may incur, including expenses of traveling to the new location and transporting household goods and personal effects, are deductible so long as you meet certain requirements relating to when you begin work at the new position and how far the new job is from the old job and your old residence. These expenses are deductible even if you are seeking employment for the first time or in a completely new field. Also, qualified moving expenses reimbursed or paid by your employer are considered nontaxable fringe benefits.

You also may be able to deduct the expenses you incur in searching for a new job, including the costs of a head hunter or employment service, and the expense of preparing your resume. These expenses are deductible so long as the job being sought is in the same line of work as the old job, even if you are unemployed at the time of the job search. Further, the job search does not have to be successful in order to qualify for the deduction. However, job hunting expenses for a first job, or related to changing to a new career, are not deductible.

Although these are just a few examples, there are many more tax issues that you should consider. It can be a great way to get money back at tax time for expenses incurred in your job search.