Combining the words "unemployment" and "tax day" in the same sentence may seem like an oxymoron, but it actually makes for smart tax planning and perhaps some relief, say officials from the employment pros at Challenger Gray Christmas.
If you've been laid off, there are tax breaks waiting in the wings if you know where to look. So America's 13.7 million jobseekers and Minnesota's 161,000 unemployed: listen up.
"It is critical that these individuals seek out any financial advantage they can achieve while between jobs,” said CEO John Challenger. He admits that it's "undoubtedly an overwhelming task" for most people to figure out eligibility for a particular deduction or credit. But "for the unemployed it can be even more daunting, since their top priority is to find a job, not a tax credit."
But soldier on, you must. Luckily, there's help.
Across the Twin Cities, many public libraries host free tax clinics that are staffed with volunteers. (Hint. Call first to make an appointment). Separately, the IRS has said it's willing to work with the unemployed, Challenger said.
What's important to remember is that the unemployed may be able to write off expenses associated with continuing education classes taken to keep their skills fresh. And they may be able to deduct travel expenses associated with job interviews or maintaining a home office for doing freelance assignments, Challenger said.
“The Internal Revenue Service recognizes the difficulties [of] those who have been unemployed.... and has announced measures to help those who cannot meet their financial obligations,” Challenger said. In some cases, the IRS will consider settling a debt for less than the full amount. In other cases, the IRS is willing to wave late penalties (but not interest) for up to six months.
The IRS said it will hold three Saturday Open Houses at select IRS offices around the country this month. Taxpayers can find the location, telephone number and business hours of the nearest assistance center by visiting the Contact My Local Office page on IRS.gov.
Besides, individual meetings, the unemployed and job seeking tax payers can find miscellaneous deductions from Publication 529 on the IRS website.
Challenger also suggested that full- and part-time workers consider deducting eligible job-related expenses that exceed two percent of adjusted gross income.
These types of miscellaneous deductions may include unreimbursed employee expenses such as: dues paid to professional organizations; depreciation on a business computer or cell phone; licenses and regulatory fees; home office used exclusively in one’s work; subscriptions to professional and trade magazines; travel, transportation, entertainment and gift expenses related to one’s work; union dues and expenses; and work-related education.