| PARSIPPANY, N.J., March 13, 2007 /PRNewswire-FirstCall via COMTEX News Network/ -- Jackson Hewitt Tax Service(R), an industry leader providing full service individual federal and state income tax preparation, continues its weekly series, "Jackson Hewitt Tax Time Tips." This week's tips offer suggestions for taxpayers who incurred costs related to looking for a new job in 2006. This Week's Tip: No matter what your line of work, there are several deductions that can be claimed on your tax return if you spent time job- searching in 2006. Deductible expenses include costs for working with an employment agency, resume preparation costs and travel expenses. In addition, you can often deduct expenses if a new position requires relocation.
- Deductible expenses related to a job search include: unreimbursed expenses for travel, tolls, parking, long-distance phone calls, career counseling and preparation of a resume (typing, printing, copying and mailing). "These kinds of items are deductible provided that the job you are looking for is in your present field of employment," notes Mark Steber, Vice President of Tax Resources, Jackson Hewitt Tax Service. "You can deduct these expenses whether you were offered the job or not."
- Many people use the services of an employment or outplacement agency when seeking a new position. It is possible to deduct fees you pay to these organizations, if you are looking for a new job in your current occupational field. If the company that has hired you is responsible for the employment agency fees, they cannot be included on your individual income tax return.
- If a new job requires a relocation, you can often deduct certain moving expenses if these are not reimbursed by your new company. Some common deductions include moving household and personal items, traveling to a new home (accommodations but not meals) and parking fees, tolls, gas and oil expenses for a vehicle (using the moving mileage rate of 18 cents per mile for a 2006 tax return).
- Taxpayers who collected unemployment benefits during the year should receive Form 1099-G, Certain Government Payments. All state unemployment benefits are taxable income for federal tax purposes and are reported on Form 1099-G, Box 1. The federal withholding amount, if any, is reported in Box 4.
- If you were unemployed during 2006, you will still most likely need to file a tax return for the year. When one of your sources of income is unemployment compensation, you may have a balance due if you did not have enough income tax withheld or if you did not make estimated tax payments on a quarterly basis.
- Those who chose to start their own business or worked as a consultant during the year must report their income as self-employment income, using Schedule C, Profit or Loss from Business. Steber notes that if you are self-employed with net earnings of $400 or more, it is necessary to pay self-employment tax on the income reported on Schedule C. You may also need to make estimated payments to cover the amount of self- employment tax or income tax associated with the income you received. A Jackson Hewitt tax preparer can assist you in determining what you may owe given your situation.
Finally, keep in mind that there are some situations where job expenses cannot be deducted. These include cases where taxpayers are looking for a job in a new occupational field, expenses for first-time job seekers and situations where there is a significant amount of time between the date when your last position ended and when you begin to search for a new opportunity.
Information on all of the deductions related to job hunting as well as deductions related to over 50 top professions can be found by going to www.jacksonhewitt.com. To speak with a local tax preparer or locate a nearby Jackson Hewitt office, contact 1-800-234-1040.
About Jackson Hewitt Tax Service Inc.
Jackson Hewitt Tax Service Inc. (NYSE: JTX), with over 6,500 franchised and company-owned offices throughout the United States during the 2007 tax season, is an industry leader providing full service individual federal and state income tax preparation. Most offices are independently owned and operated. The Company is based in Parsippany, New Jersey. More information may be obtained at www.jacksonhewitt.com. To locate the Jackson Hewitt Tax Service(R) office nearest to you, call 1-800-234-1040.
SOURCE Jackson Hewitt Tax Service Inc.
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