Can Changing Jobs Effect your Tax Return?
When it comes to taxes, it can be a confusing and intimidating process. It is important to understand how changing jobs may or may not affect your tax return.
Your income tax is generally based on the total income that you earned throughout the year. In most cases, changing jobs will not have any effect on your overall income tax return. Your paycheck will likely have different withholding amounts, but the amount of tax that you owe at the end of the year should not be affected.
If you have expenses related to your job, such as mileage or uniform costs, you may be able to use these to offset the income that you earned throughout the year. Depending on your job, the expenses may or may not be the same. For example, if you switch from a job that requires lots of travel to one where you remain in the office, the business expenses related to your job may be reduced.
Credits and Deductions
Some credits and deductions may also affected when you change jobs. If you are switching to a job where you are now able to contribute to a retirement plan, you may be eligible to claim a tax credit or deduction. Additionally, switching to a job with health insurance benefits may qualify you for a tax credit.
In general, changing jobs should not have a significant effect on your tax return. However, there are some situations where it may change some of the credits and deductions that you qualify for. It is important to keep in mind that any change to your job may have an impact on your tax return.
Be sure to consult a tax professional if you have any questions about how your job switch may affect taxes.