Job changes are an emotional issue. Will your next employer be better or worse? How will your new colleagues treat you? Will you be able to handle the additional responsibilities? Will the hours demanded of you still give you time for family and friends?

What if it doesn’t work out? Will you love or hate your new job? While there is no way to answer these questions until you actually begin your new job, there are questions you can get answers to before you make the move. This article will attempt to help you identify the right questions to ask to assist you in making your decision.

Will you be treated as an employee or independent contractor?

This should be an easy one but you would be surprised how many big companies are hiring individuals as independent contract workers verses employees. How you will be classified impacts your taxes significantly. As an employee you and your employer share equally in paying Social Security and Medicare taxes. As an independent contractor you will have to shoulder the entire burden of paying these taxes, which is 15.3% of your total income less any allowable tax deductions. This tax is known as self-employment tax and is in addition to your income tax. Know your employment status.

What to do with your old employer retirement plan money?

There is no simple answer to this. You have four options: 1. Keep the funds with your old employer 2. Roll your old employer funds into your new employer deferred compensation plan or 3. Roll these funds to a Rollover IRA or 4. Take a lump-sum distribution. As a general rule I advise clients to roll their old retirement funds into a Rollover IRA. This gives you control over your money and allows you to expand the scope of your investments. Do not take a lump-sum distribution if you can avoid it. It is very costly, especially if you are under 59 ½. Before you do anything you should consult with your Accountant to see which option makes the most sense.

What types of benefits is the prospective employer providing?

Here you want to focus on retirement plan matching funds/vesting, health insurance coverage and premiums required by you, disability insurance & life insurance. As a general sub-question you want to know how long you will have to wait before you can participate in each of the employee benefits plans being offered. Regarding deferred compensation plans, you want to know if the employer makes matching contributions to the plan and how long it takes for the employer matching contributions to be yours (vesting). Many employers who provide matching contributions will match anywhere from 3%-6% of salary. Some even offer profit sharing contributions in addition to the matching contributions. The time it takes for you to actually vest in the employer contributions is typically three years or more.

For health insurance, in addition to finding out when you can participate, you want to find out who their carrier is and what percentage the employees are required to contribute to the premiums. If the timeframe for participating is not immediate then you need to determine if you can continue your old employer plan under COBRA. If your former employer had 20 or more employees then you may be able to obtain COBRA continuation coverage at group rates. If your prospective employer offers disability insurance, as a general rule, participate. You will want to find out when the disability coverage kicks in, how much it costs and what percentage of compensation it will provide you. Employer-offered life insurance benefits, if offered, for non-managerial employees, will typically be 2 times earnings.

Can you deduct job search expenses?

The answer is yes, however, the amount you will actually be able to deduct will be the amount which exceeds 2% of your Adjusted Gross Income. The largest component of your job search expense will likely be travel. Keep a record of every mile you log going to interviews, meeting headhunters etc. Keep a receipt for train, bus or air travel, postage, employment agency fees and supplies.

Is the company paying to relocate you and your family?

If yes, then get a copy of their Relocation Policy and understand the Relocation Gross-up. The Gross-up is the money the employer reimburses you for taxes on non-deductible moving expenses. The amount of nondeductible moving expenses and the Gross-up will be included on your W-2. You want to understand the tax rate they are using in the Gross-up calculation. If your effective tax rate is 40% but the Gross-up is determined using a lower tax rate, you will end up owing taxes when you file your tax return. Other factors include a rebound provision, which allows you to relocate back to your home state, at the employer’s cost, if you are terminated or if your position is eliminated and a provision where the employer assists you in selling your old home.

The last point I want to make involves Social Security tax and New Jersey Unemployment/Disability taxes. Any time you change jobs, the new employer treats you as a new employee for these taxes. Both categories of tax have their own separate wage limits for purposes of determining how much is withheld from your wages. This wage limit is $106,800 (2009) for Social Security tax. Once your wages exceed this limit, the amount of tax the employer is required to withhold goes down, thus increasing your net pay. When you begin a new job the wage limits are reset to zero. This translates into excess withholding and lower net pay. Generally, employees will receive this excess back, in the form of a higher refund, when they file their tax returns.