Job loss means new tax implications

Severance, unemployment payments treated as income

Published On: Jan 17 2012 04:49:46 PM EST   Updated On: Dec 09 2010 09:28:17 AM EST

With so many people losing their jobs, Americans are learning firsthand about the implications related to taxes.

First, you should know that severance pay and unemployment checks are treated as income, and as such are taxable.

And so are any payouts coming from a former employer covering any unused vacation and sick time you've piled up.

The good news is that some expenses involved with your search for a new job may be deductible whether or not you actually get that job. Such things as employment agency fees, resume help and travel expenses for interviews fall into this area.

Also, potentially deductible are moving costs you've had to pay out of your own pocket because of a change in your work location.

There are some requirements you'll have to meet, however, involving the timing of the move and the distance.