Tax tips for tough times: if you've changed jobs or are unemployed, you can avoid a high tax bill. (Tax Strategies).

If you're in the midst of a job change, there may be some tax breaks that can keep dollars in your pockets, rather than in the coffers of the IRS.

For people like New Yorker Patricia Allen, who wants to start a new career in interior design, job hunting can be expensive. "Besides resumes, I've had to spend money on portfolios with samples of my work, on transportation to interviews, on admissions to design shows, and so on."

Such outlays may be tax deductible only if you're looking for work in your present occupation. "If you're looking for work in an entirely new field, job hunting costs are not deductible," says Barrie Adedeji, a CPA in New York. "The same is true for educational expenses, if you take courses to learn a new line of work." Certain exceptions apply.

Adedeji says job-search expenses qualify as "miscellaneous itemized deductions" and are deductible once they exceed 2% of your adjusted gross income (AGI). For example, if your AGI is $40,000 this year, 2% would be $800. If your total miscellaneous deductions equal $1,500, you'd subtract that $800 and claim a $700 deduction. Also consider:

* IRA rollovers. If you leave a job where you had a retirement plan, you can roll the account balance into an IRA, maintaining the tax deferral. Dionne Lester, 36, of Raleigh, North Carolina, who left a senior management position with a large corporation last fall, says, "I wanted to keep the money I had accumulated in my 401(k) intact, to keep growing until I retire, so I rolled it into an IRA."

But be careful with an IRA rollover, says Genevia Fulbright, a CPA in Durham, North Carolina. "Always ask for a trustee-to-trustee transfer. Don't accept a check for the money in your plan. Instead, the check should be issued to the financial institution that will hold your IRA. You avoid the required 20% withholding."

For example, if you handle a $100,000 IRA rollover yourself, your former employer will give you only $80,000 and send the other $20,000 to the IRS: It's up to you to put the other $20,000 into your IRA. If you don't make up the amount withheld (and it may be difficult if you're between jobs), you'll owe tax on that "distribution," plus a 10% penalty before age 59 1/2.

* Self-employment deductions. Ex-employees may do some freelance work, or set up their own business permanently or until they land a new job. Darryl Lester, 39, and Dionne's husband, left his job in late 2001 to become a consultant for not-for-profit organizations, and "I've incurred expenses in buying equipment, taking prospective clients out to lunch, and developing marketing materials."

The good news is that such outlays are deductible as costs of doing business. (Business entertainment deductions are 50% deductible.) "Darryl can deduct 36.5 cents per mile for the business use of his car in 2002," says Fulbright. "He can also take deductions related to his home office, which include a portion of the utility bills, 100% of his business telephone line, and 100% of the direct office supplies." In order for home office deductions to be sustained, your headquarters must be a space in your home that's used exclusively for business purposes.