Looking for a new job? You may be able to deduct the cost of your job search on your tax return.

If you’re one of the many people searching for a job right now, you may be able to deduct some of your expenses, such as attending career fairs, on your tax return as long as you are looking for a new job in your current occupation. Here are a few things to keep in mind:

· Job search expenses fall into the category of miscellaneous itemized deductions on Schedule A, Itemized Deductions. If your total itemized deductions are higher than the standard deduction, it is generally better to choose to include your itemized deductions. Also, in most cases these expenses must exceed your adjusted gross income by 2 percent to provide a tax benefit.

· Your 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 the fees you pay for employment and outplacement agencies. If your employer pays you back in a later year for these fees, you must include the amount 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.

· If you travel to a different area to look for a new job, you may be able to deduct travel expenses to and from that area. You can deduct the travel expenses only 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 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 about job search expenses, read IRS Publication 529,Miscellaneous Deductions. This publication is available at the IRS website, IRS.gov, or by calling 800-TAX-FORM (800-829-3676).

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NOTE TO EDITOR: Below are links to IRS publications, tax topics and videos describing the tax benefits available to people searching for jobs.

· IRS Publication 529, Miscellaneous Deductions

· Tax Topic 508, Miscellaneous Expenses

· Tax Topic 511, Business Travel Expenses

· YouTube: Job Search Expenses: English, Spanish, ASL

Use IRS Withholding Calculator to adjust your withholding

As of March 18, the Internal Revenue Service had issued more than 63 million refunds with an average refund of $3,004.

The larger the tax refund you receive, the more money you’ve paid throughout the year because your withholding does not accurately reflect the tax you owed. Of course, there are some exceptions, such as special tax credits, that may be the cause of a larger refund. On the other hand, you could have owed tax when you filed your tax return this year. Either way, it may be time to evaluate your tax withholding and determine whether or not it needs to be adjusted.

If you are an employee, the IRS Withholding Calculator can help you determine whether you need to give your employer a new Form W-4, Employee’s Withholding Allowance Certificate, to avoid having too much or too little federal income tax withheld from your pay. You can use your results from the calculator to help fill out the form. You’ll find the IRS Withholding Calculator located at www.irs.gov — just enter the word calculator in the search box. You can also use the Form W-4 worksheets in Publication 919, How Do I Adjust My Tax Withholding?

Major life changes also could mean a necessary change in your withholding. Marriage, divorce, death of a dependent, and the birth or adoption of a child are all life changes that can result in a need to change the number of exemptions you claim on your W-4. Check your withholding if you had personal or financial changes in your life or if there were changes in the law that might affect your tax liability.

You may want to consider using the IRS Withholding Calculator to reevaluate your tax withholding for 2011, your estimated tax payments or both.

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Related Items on IRS.gov

• Publication 919, How Do I Adjust my Tax Withholding?
• IRS Withholding Calculator
• Form W-4, Employee’s Withholding Allowance Certificate

Are you an employee, self-employed or an independent contractor? Find out the difference.

The question of whether you are an employee or a self-employed independent contractor is very important and may not always be easy to answer. You should understand the category you fall under, since it'll affect how you pay your taxes.

You are an employee if –

Your payer has the right to direct and control your activity. The factors of control fall into three key categories:

• Behavioral control
• Financial control, and
• The relationship between you and your payer.

No one single fact determines worker classification, rather all of the facts and circumstances of a relationship weigh in the correct worker classification determination.

If you are an employee, you are required to report the wages you received during the calendar year on your personal income tax return because they are taxable income. Your employer is required to report wages paid to you during the year on a Form W-2. Your employer is also required to ask you to fill out a Form W-4 and you are required to return that form to your employer. Form W-4 directs your employer on how much tax to withhold from your pay. If you are unsure how much to request be withheld on your Form W-4, check the IRS Withholding Calculator for guidance.

You are an independent contractor if –

You have the right to direct and control the most important aspects of your activity.

People such as contractors, subcontractors and auctioneers, who maintain an independent trade, business or profession in which they offer their services to the public, are generally independent contractors.

If you are an independent contractor, your income earned will be reported to you by the payer on a Form 1099-MISC, unless the payer pays you less than $600 in the calendar year. However, you must report all the income you earned during the year, even if your client does not issue a Form 1099-MISC for your services.

As an independent contractor you are self-employed and are generally required to attach a business return to the annual income tax return that you file and to pay estimated tax quarterly. Self-employed individuals generally have to pay self-employment tax (Social Security and Medicare tax) as well as income tax. To read more on your tax obligations or for more information on estimated tax, go to the Self-Employed Individuals Tax Center on IRS.gov.

If your worker status is unclear –

You or your payer can file Form SS-8, Determination of Worker Status for Purposes of Federal Employment Taxes and Income Tax Withholding, with the IRS to help determine your status.

Additionally, The IRS developed Form 8919, Uncollected Social Security and Medicare Tax on Wages, to simplify the process for employees to report their share of uncollected Social Security and Medicare taxes due on their compensation when their employers have misclassified them as independent contractors.