That’s about all I can say without going off the deep end and alienating all of you guys. I’m self-employed so that doesn’t make things any easier. Keeping track of expenses, deductions, incomes etc is a full-time job in itself. Lucky for me, there are finance bloggers like Mrs. Micah who can help make sense of all of this tax stuff. Her latest post Mammoth 2009 Tax Credit and Deduction List is a god send.
Here’s a quick snippet of just some of the advice she offers. I figure these two bullets will probably interest you guys the most.
Qualified Job-Hunting Expenses – Deductible
This won’t help if you’re changing careers, but if you’re searching for a new job or if you were just laid off and are hunting for a job in your field, you can deduct certain expenses from your 2009 job search. From the IRS website
- In order to deduct job search costs, the expenses must be spent on a job search in your current occupation. You may not deduct expenses incurred while looking for a job in a new occupation.
- You can deduct employment and outplacement agency fees you pay while looking for a job in your present occupation. If your employer pays you back in a later year for employment agency fees, you must include the amount you receive in your gross income up to the amount of your tax benefit in the earlier year.
- You can deduct amounts you spend for preparing and mailing copies of a résumé to prospective employers as long as you are looking for a new job in your present occupation.
- If you travel to an area to look for a new job in your present occupation, you may be able to deduct travel expenses to and from the area. You can only deduct the travel expenses if the trip is primarily to look for a new job. The amount of time you spend on personal activity compared to the amount of time you spend looking for work is important in determining whether the trip is primarily personal or is primarily to look for a new job.
- You cannot deduct job search expenses if there was a substantial break between the end of your last job and the time you begin looking for a new one.
- You cannot deduct job search expenses if you are looking for a job for the first time.
For more information on tax benefits for job seekers and how to claim them, here’s the IRS web page.
Self-Employment Tax – 50% Deductible
One of the downsides of certain forms of self-employment is having to pay a self-employment tax. The good news is that you can deduct 50% of your self-employment tax when calculating your AGI. This was something I had not realized until reporting my blog earnings last year and paying the self-employment tax for the first time. More on self-employment tax from the IRS website.
Mrs. Micah explains many, many more 2009 tax deductions and credits on her blog. I highly suggest you click through and read them all. You’re likely to find new ways of saving money this year.
Which tax deductions are you taking advantage of this year?
There's only ONE program I really recommend. It helped me turn my 'hobby' into a $10,000+ per month money making machine. Click here for the exact formula I followed.