Filing Taxes After a Career Change or Layoff
A career shake-up—whether it’s a new job, a layoff, or time off—can bring big changes to your finances and your taxes. But don’t worry—filing after a transition doesn’t have to be stressful. Here’s what to keep in mind.
1. 🧾 Report All Income
Whether you worked part of the year, had freelance gigs, or received unemployment benefits—they all count as taxable income. Yes, even unemployment. 😬
2. 💼 New Job, New W-4
If you started a new job, make sure your W-4 is filled out correctly. This helps your employer withhold the right amount of tax going forward.
3. 🧮 Withholding Might Be Off
If your income changed drastically, your tax withholding might not match your new situation. Use the IRS Withholding Estimator to see if you need to adjust.
4. 💸 Deductions for Job Searching (Sometimes)
While job search costs aren’t deductible for most people anymore, if you’re self-employed, certain expenses related to finding new work or training may qualify.
5. 🏥 Health Insurance Tax Credits
If you bought health insurance through the Marketplace after losing a job, you might qualify for a Premium Tax Credit to reduce your taxes—or get a refund.
6. 🕒 Don’t Wait to File
Even if you didn’t earn much, filing can still unlock tax credits or refunds. Plus, it’s your chance to make sure everything from your career transition is correctly documented.
✨ Final Tip: Life changes are a great time to review your tax situation. A little planning now can save you money—and stress—next tax season.
