Q: Real Talk Series: I lost my job this year. What do I need to know before filing my taxes?
A: I’m sorry to hear about your loss of employment this year. Losing a job can really set you back financially, but here are a few tips that may help you save money when you file your taxes.
Even though unemployment you receive is taxable, you can make a smart tax move before the end of the year that won’t cost you any money, but may save you on your taxes. Cleaning out and donating clothing and household goods can help others in need and give you a nice deduction on your taxes.
If you searched for a job in your same field you may be able to deduct expenses related to job search like, agency placement fees, resumes, and travel even if you didn’t get the job.
If you now have a new job, congratulations! Don’t forget that if your new job 50 miles farther from your old house than the distance between your old house and your old job then you can deduct the cost of moving that was not reimbursed by your employer. Deductible costs include the expenses paid for the moving company, storage, lodging, and even the cost of moving your pet.
Health care is another area where you can save on your taxes. If you purchased health insurance in the Health Insurance Marketplace or your state Marketplace and received an advance premium tax credit to help you pay for 2016 health insurance you may see a bigger premium tax credit when you file your taxes since your income may be lower than what was projected as a result of you losing your job. You may also be able to qualify for an exemption from the penalty for not having health insurance if you suffered a hardship while you were off work.
Did you start a side job to supplement your income? If you were self-employed you may be able to deduct expenses you never dreamed were possible like: start-up costs, your car you used for your business, and computer equipment. Tax deductible business expenses like these can save you money for your business and on your taxes.
Don’t worry about knowing these tax laws. TurboTax will ask you simple questions about you and will give you the tax deductions and credits you’re eligible for based on your entries.