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Having Job Jitters?

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7. I’m out of work and can’t afford COBRA for my family. What can I do?

A. The new economic stimulus package will make it easier for unemployed people to afford extended health benefits under COBRA, a federal law that allows workers to continue group health insurance when they leave a job. Many people eligible for COBRA opt out because the plan can be so costly. But now, as part of the new package, if you lose your job between Sept. 1, 2008, and Jan. 1, 2010, you will be able to keep your company health insurance for nine months by paying 35 percent of your COBRA premiums.

If that’s still too expensive, you may be eligible for the federal Medicaid program, or your children may qualify for the federally supported State Children’s Health Insurance Program (SCHIP). This program provides, at low or no cost, insurance that pays for doctor visits, prescription drugs and hospitalization. Each state has different eligibility rules, but in most states uninsured children 18 and younger whose families earn less than $34,100 a year (for a family of four) are eligible.

In some states, the parent of a child who receives SCHIP is also eligible for coverage. To learn more about the Medicaid and SCHIP programs and to locate the toll-free phone numbers for your state, go to the Centers for Medicare & Medicaid Services’ website.

8. Can I claim the money I spent on job searches as tax deductions?

A. Yes. By declaring miscellaneous itemized deductions, taxpayers may lower their taxable income for the year, says Steber. Some examples of what’s deductible: expenses related to creating, printing and mailing a resumé; fees for a career coach or headhunter; long-distance or cellphone charges directly associated with a job search; transportation to an interview (taxi, train, plane or mileage costs); and meals and lodging if the interview was out of town.

Miscellaneous itemized deductions must be more than 2 percent of your adjusted gross income (your gross income less certain allowed business-related deductions). So if your adjusted gross income is $40,000, Steber says, you can take all miscellaneous deductions in excess of $800. Remember to keep your receipts to document your expenses.

9. I was laid off and took money out of my 401(k) plan to help pay bills. I’m 57. Will I owe taxes on that withdrawal?

A. Most likely. Generally, if you make a withdrawal from a qualified retirement plan, such as a 401(k) or IRA, and that money is not paid back within 60 days, you will owe taxes on it. Because you made the withdrawal before reaching age 59 1/2, you’ll be subject to a 10 percent penalty. For more information, go to the IRS online and see Publication 575, “Pension and Annuity Income.”

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