Tax questions

February 13, 2000

Members of the Maryland Association of Certified Public Accountants are answering readers' tax questions through April 15.

Q.I lost my job last year due to plant closure. I went to unemployment and took a computer course and I got a banking job. I also bought books for the computer course as well as a computer to follow up on it. I also had to buy professional clothes. Can I deduct any of these expenses? Also, when I was job hunting, can I deduct the parking fees and things like that?

A.Education expenses (computer course) are not deductible if the program is needed to meet the minimum standards for the taxpayer's present job or intended employment. It is only deductible to improve skills for your existing employment. This would apply to the course cost, books and travel to and from classes. Job-hunting expenses in a new trade or business are not deductible, although expenses incurred searching for a job within your current field are deductible. The cost of buying a new wardrobe for a professional job also is not deductible. Only the cost of uniforms, work boots, etc. is deductible when the employee's occupation is one that specifically requires special apparel or equipment as a condition of employment and it is not adaptable to general or continued usage so as to take the place of ordinary clothing. The good news is that the expenses incurred for classroom instruction and books will qualify for the Lifetime Learning Credit. The credit is equal to 20 percent of the qualified expenses up to a maximum of $1,000. There are phaseout rules for this credit if your adjusted gross income is too high. Don't forget that the unemployment compensation will be taxable.

Corinne M. Bradac, CPA, Linton, Shafer & Co., Frederick The above advice is for general purposes only and is not intended as legal, accounting or tax advice. Specific situations may vary.

To ask a tax question, call Sundial, The Sun's telephone information service, at 410-783-1800. Call 410-268-7736 in Anne Arundel County, 410-836-5028 in Harford County, 410-848-0338 in Carroll County. Using a touch-tone phone, punch in the four-digit code 6225 after the greeting. You can also submit questions by e-mail through The Sun's Web site, www.sunspot.net. Click on Business.

Selected questions will be answered in the Business section.

Pub Date: 2/13/00

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