Job Hoppers, Don't Get Tripped Up by Tax Time

April 6 -- How many jobs did you have last year?

Whether you got laid off from a company that still exists, walked out with the rest of the crew as they locked the door behind you or just plain quit a job, you had to go through the hassle of finding a new job.

Not only did you have to be the "new kid" for a while but you had to figure out where they kept the staples and the foosball table.

The upside of this job-changing mess is that many of your job-hunting expenses may be deductible. The downside is you may have a tough time gathering the information you need to get your tax return together.

Dot-Com Dead, W-2 MIA

If you worked for a company that is no longer in business, emotional trauma aside, you may have difficulty contacting the payroll department if your Form W-2 — Wage and Tax Statement is missing in action or incorrect.

Every quarter a company must file a Form 941 — Employer's Quarterly Federal Tax Return to the Internal Revenue Service reporting the income tax withheld from employees' wages. When a company goes belly-up, it must file a final Form 941 and issue W-2s at the same time, says Bob Trinz, an editor at RIA, an information provider to tax professionals

So, in theory, the company had until the end of the quarter in which it shut its doors to file its final Form 941 and get out the corresponding W-2s. So, again, in theory, if you were an employee at a now defunct company, you should've gotten your W-2 already.

But what if you didn't? Odds are pretty high the IRS knows exactly how much you were paid, so you have to report that income. Your best bet may be to scrape up your final pay stub. It should have a year-to-date tally of salary as well as all the taxes withheld.

If you file your return by snail mail, a copy of your W-2 must be attached. The best you can do is attach a copy of your final pay stub and include a note explaining your situation to the IRS.

Beware of Excess Social Security

Social Security tax withheld becomes an issue when you switch jobs, reminds Trinz. Social Security tax is part of your payroll tax, or FICA tax. Currently, 6.2 percent of your wages, up to $76,200, are withheld for Social Security for 2000 (or $4,724.40). That jumps to $80,400 in 2001. The remainder of your FICA tax goes to Medicare, so 1.45 percent of your wages is withheld for that. There is no wage limit on this.