06 Oct IRS Publication 4128 – Tax Impact of Job Loss
Posted at 00:00h in Unemployment
IRS Publication 4128 Tax Impact of Job Loss was released in August of 2009.
The publication explains the job loss tax issues connected to severance pay, unemployment compensation, pension plans, IRAs, expenses for a job search, and possible moving costs. It also discusses self-employment issues for the newly unemployed. The IRS provides the following information to assist those newly unemployed:
Severance pay and unemployment compensation are taxable. Payment for any accumulated vacation or sick time is also taxable.
Generally, withdrawals from a pension plan are taxable unless they are transferred to a qualified plan (such as an IRA).
Certain expenses incurred while looking for a new job may be deductible. Examples of deductible expenses include employment and outplacement agency fees, resume preparation, and travel expenses for job search and interviews.
Moving costs you incur because of a change in your job location may be deductible. You must meet certain criteria relating to distance moved and timing of the move.