Part-Time Income Taxes

• Before familiarizing yourself with the various forms of IRS tax relief, evaluate whether your level of income from part-time employment is sufficient to take advantage of the federal tax deductions and credits. Generally, these benefits are available only if you must file a tax return. As with all other employees who are not dependents, the IRS requires you to file a tax return when your annual part-time income exceeds the standard deduction for your filing status plus the personal exemption you are eligible to claim. Earning more than this amount is the only time you may potentially owe income tax, and therefore, be able to reduce the amount you owe with deductions and credits.
  
  

Job-Related Expenses

• Even though you work part time, you are still eligible to claim a deduction for job-related expenses that your employer doesn't reimburse you for. This can cover a wide range of expenses, such as using your personal car to complete work tasks, purchasing uniforms you must wear at work, courses your employer requires you to enroll in to remain an employee as well as any other expense you incur as part of your part-time employment. However, one condition to claiming deductions for job-related expenses is that you elect to itemize your deductions in lieu of claiming the standard deduction.
  
  

Adjustments to Income

• In most cases, your part-time employment income will be low enough to qualify for the various adjustments to income. These adjustments work the same as deductions; however, most of them are limited if your income is too high. For example, the IRS classifies the student loan interest deduction as an adjustment to income, but only allows taxpayer's whose adjusted gross income is below certain levels to claim the deduction. However, there are other adjustments that are not subject to this limitation such as the alimony payment deduction or the moving expenses you can deduct.
  
  

IRS Tax Credits

• One of the most substantial forms of tax relief the IRS offers all taxpayers, including part-time employees, are various tax credits. Tax credits offer more savings than a deduction in that it reduces your tax bill on a dollar-for-dollar basis. Many credits also limit eligibility to those with AGI below certain levels. For example, if you are a part-time student and attend a college or vocational school, you can claim one of the educational credits that cover your tuition expenses. However, both credits impose a maximum AGI each year which may be easier to satisfy as a part-time employee.