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Perma-interns: Is working for free a good career bet?

When he isn’t hitting the books at Northwestern University this summer, Mike Boyle of Chicago dreams of making it in the music industry. And why not? With his ready smile, tousled hair and laid-back demeanor, Boyle comes across as sharp and affable, a hipster with heart. And he grasps the fine points of the business like few 21-year-olds you’ll meet.

Yet this organizational behavior major — who hopes to attend Northwestern’s prestigious Kellogg Graduate School of Management — is taking a calculated risk. Following a summer 2010 internship at Jeff McClusky and Associates, Boyle stayed on, although not stepping up to full-time work. Boyle instead works for the independent radio promoter 16 hours a week, earning the hourly equivalent of a well-paid babysitter. But if you ask him, this internship extension is a sure bet, even it doesn’t morph into a full-time job. “I don’t consider the experience risky whatsoever,” Boyle says.

“I’m learning a lot about the inner workings of the industry … And Jeff McClusky is a phenomenal mentor figure. He’s provided me with a sense of where I want to go and who I want to be.” (McClusky has helped break acts from U2 to Mumford & Sons.)

Boyle belongs to a growing class — some call them “perma-interns”— who’ve stretched the traditional bounds of the one-semester internship, where non-paid labor is traded for college credit. If you listen to those who know the internship game well, Boyle’s doing it right. After working for free in 2010, his modest pay entitles him to key tax deductions as an independent contractor. (CDs and downloads? Check. Concert tickets? Check.)

Perma-interns may be at the bottom of the office pecking order, but there are ways to benefit financially from the arrangement. The experts weighed in with these five tips.

1. See what your employer will reimburse. If you’re using your cellphone, taking public transit to work, or buy your own office supplies, ask your employer to foot the bill, says Jennifer Halperin, the internship and special projects coordinator for Columbia College Chicago’s journalism department. “Once they’re in place, even unpaid interns sometimes successfully negotiate for some sort of compensation for expenses,” Halperin says.

2. Consult an accountant who knows your field to see what’s deductible. “Interns in journalism would do well to seek advice from an accountant who works with freelance writers to learn what expenses can be legitimately deducted come tax time,” Halperin says. In media, these range from pens and pads to laptops. As for finding an ace accountant, Halperin suggests talking to co-workers.

5 summer tax tips for working teens

By Nancy R. Mandell

University of Massachusetts junior Evan Resnick was thrilled to get a paid summer internship at a medium-sized technology firm on the outskirts of Boston. The 20-year-old computer-science major, who lives in nearby Needham, Massachusetts, is fully aware that the competition for internships — often unpaid — and even summer jobs in the retail and food-service sectors, is fierce. This summer, the number of high school and college students with an internship is expected to outpace the 960,000 who found summer employment last year.

But with a job comes paperwork — IRS forms W4 and W9 that determine how much, if any, of earnings will be withheld as well as an often overlooked but unique opportunity to start lifetime retirement savings with a double tax advantage.

Gina Chironis, a personal financial specialist who is CEO of Clarity Wealth Management in Irvine, California, puts it this way: “Most kids don’t have a clue that if they earn only up to $5,800, they can elect not to have income taxes withheld at all, avoiding the need to file a 1040 next year to in order to recover any refunds due.” The IRS set $5,800 as the standard deduction for a single filer in 2011.

Chironis, a non-practicing CPA who is still seeing the youngest of her four children (ages 17 to 24) through the summer paperwork jungle, insists it is up to parents and their advisers, if necessary, to take responsibility for understanding the consequences of signing on the appropriate line. Without adequate preparation and proper guidance, student workers may lose advantages and savings privileges to which they are entitled.

Time to call in a CPA? Not necessarily. Professional groups like the California Society of Certified Public Accountants offer personal and website guidance designed to understand available tax benefits. Evan was fortunate that his employer emailed him the W4, often a bit baffling to first-time employees, particularly when completing it under pressure in the waiting area of an HR department. (Prospective employees can always ask to take the form home.)

Chose exemptions carefully. The hardest question is the most crucial: how many tax exemptions will you claim? IRS guidelines provided as a worksheet on the first page of the W4 usually work out to only one — the self exemption — or zero for teenagers who generally have no spouse or dependents to claim. Both mean income taxes will be withheld from paychecks, whether they are owed or not

The best tax deductions for job seekers

by Jennifer Merritt

Finding a new job can be expensive — particularly for professionals who spend money on pricey career coaches, resume experts and, increasingly, travel to interviews. But some 73 percent of professionals say they plan to ramp up their job hunt as the economy gains steam, a recent survey from job-and-career website Glassdoor.com survey found.

The good news for those itching to make a move or for cash-strapped layoff victims looking for work: If you’re hunting for a job in your current profession and you itemize on your tax return, you can deduct a whole host of job search expenses, even if you didn’t end up in a new job.

The IRS spells out a few deductions like employment agency services and the costs associated with printing and mailing your resume. But you can deduct a lot more than the basics. What, you ask? How about that $250-per-hour career coach who helped hone your interview and presentation skills or the $500 you paid to have your resume revised and polished? They’re both deductible job-search expenses, according to tax experts.

To take the deduction, your overall miscellaneous deductions (including job search expenses) must add up to more than two percent of your Adjusted Gross Income — and you can only deduct the amount that exceeds that two percent, says Jackie Perlman, a CPA and principal tax analyst at H&R Block’s Tax Institute. Professional association dues and subscriptions to professional journals are just a few of the miscellaneous, non-search-related expenses that can help reach the two percent floor.

If your AGI is $100,000, for example, your miscellaneous deductions must total more than $2,000; if they add up to $2,500, you can deduct $500. (One less-pleasant bit of fine print: Miscellaneous deductions could lower your tax burden to the point that you fall into Alternative Minimum Tax territory, which negates the benefit of claiming such expenses.)

Tax experts say diligent record-keeping to keep track of expenses and pre-planning your job-hunt activities when you travel are key since you’ll need to prove your expenses were primarily job-search related if you — yikes — happen to be selected for an audit. Here’s a look at what you can deduct and how to keep track:

Dream jobs for the 20-something set

How does someone go from having an interest in criminal law to penning a book about finding your dream job?

Just ask 29-year-old Laura Dodd, whose own bizarre career trajectory led her to having dozens of conversations with people just like her: a hopeful 20-something ready to jump into the worst market in decades — without settling for a mundane 9-to-5 job.

The result is “Dig this Gig: Find Your Dream Job — or Invent It“, a behind-the-scenes look at real-life jobs that will have some readers asking, “You can actually get paid to do that?”

Reuters talked to Dodd about the new reality of the job market, what 20-somethings really want (hint: it’s not a six-figure salary), and the coolest job she’s ever heard of.

Tell me why you wrote the book.

It’s so simple, really: this is truly the book I wanted, needed, and wished I had after college. It’s real people talking about real jobs and how you get there….stripping off the nebulous titles and telling the good, bad and ugly about jobs.

April Fools’ Day pranks: Tread carefully at the office

It’s not hard to pinpoint exactly when Tim Wiedman began to sour on the idea of April Fools’ Day pranks in the office. It was shortly after his hair had been set on fire.

Wiedman was an assistant manager at a fast-food joint at the time, and wearing one of those flimsy paper hats. His colleague Rick thought it would be a riot — and a fitting tribute to April Fools’ Day — to sneak up behind his buddy and set his cap aflame.

Rather than creating a slow burn, though, the gag made the manager’s hat go up like a bonfire on the Fourth of July. “He had to pull it off, throw it on the floor, and stamp out the flames,” remembers Wiedman, who’s now a business professor in Lincoln, Nebraska. “I’d been singed, and for several weeks, it looked like I was going bald.”

Wiedman isn’t alone is being the target of workplace mischief on April 1. According to a survey by online jobs site CareerBuilder.com, 33 percent of respondents said they’d been the victim of an office April Fools’ Day prank –- and a quarter said they’d actually done some pranking themselves.

“That’s a big number, and I was a little surprised,” says Michael Erwin, CareerBuilder’s senior career adviser. “It’s probably because people are putting up with a lot in the office these days: The staff is often leaner, and they’re expected to do more work than ever. I wouldn’t be surprised if this Friday, people try to pull something lighthearted in the office.”

Among the Harris Interactive poll’s 5,000 respondents, there were some standard gags: Gluing phones to receivers, dumping goldfish into water coolers, changing office clocks. But there were also some inspired ones, like changing a co-worker’s computer wallpaper into the screen that pops up when your entire system is about to crash. Or the hiding of a colleague’s cellphone in the ceiling tiles, so no one can locate the ring.

That last one might have been stolen from NBC’s The Office, where Jim Halpert has made office pranking into an art form with his torture of cubicle neighbor Dwight Schrute. Among Jim’s greatest hits: Sending faxes to Dwight from his future self; recruiting him for a classified CIA mission; and planting a bloody glove in his desk and convincing him he was a murderer. And, of course, the original classic of suspending his stapler in a Jell-O mold.

You’re the boss now. Here’s how to deal

All those years of climbing the corporate ladder have finally paid off: you’re the boss now.

But being the head honcho isn’t easy — just look at Michael Scott, the needy boss in hit TV show The Office, whose bumbling handling of being a leader and a buddy brings no shortage of corporate hijinks.

Enter Kevin Eikenberry, the cheekily titled “chief potential officer” of his own consulting firm and author of “From Bud to Boss: Secrets to a Successful Transition to Remarkable Leadership”.

“If you’re a new leader, often times people say it’s no big deal and they don’t want to talk about it. But I can’t stress enough that having a conversation about it is going to stop it from becoming a much bigger problem,” Eikenberry says.

Reuters talked with Eikenberry about being a leader, the difference between being friends and being friendly, and why you need to have “the talk” with your former coworkers.

Tell me why you wrote this book — has this ever happened to you?

Careers: How to break out of the 9-to-5 rut

Kristin Cardinale works for herself, balancing at least seven or more titles at any given time: career coach, consultant, technology instructor, adjunct college professor, seminar speaker, columnist and owner of a technical support business. She says she’s happier and better paid now than when she held her previous 9-to-5 “dream job.”

She doesn’t like the reputation that’s hung on freelancing, and she hates the idea that people are stuck in jobs based on fear. So, she wrote a book about her experience (add that to her list of job titles) and offers a guide for people who might want to strike out on their own.

“The 9-to-5 Cure: Work on Your Own Terms and Reinvent Your Life” makes a compelling argument that redefining yourself as what she calls a “patchworker” might be the solution to today’s employment malaise. Reuters contributor Caryn Brooks spoke with Cardinale about her experiences.

Why use the term patchworker instead of freelancer?

Freelancing has been associated with giganomics. Giganomics is defined as a penny ante slug trying to just survive another day and piece it together. Freelancing has been depicted in a very negative light. It’s a focus on desperation, and it’s a myopic view of the landscape.

So by using a new term you’re trying to reignite a new vision for how people see this kind of work?

Yes. “The 9-to-5 Cure” is based on some central components. It’s an opportunity for me to share my career strategy with people who feel there are no alternatives beyond desperate survival mode. “The 9-to-5 Cure” says that you can find enjoyable work in abundance. The book also focuses on two pieces of employment strategy. The first is lifestyle design: deciding what your priorities are and making a commitment to honor those. The second is what I call the patchwork principle, which is a freelancer career strategy.

You’re retired. Now get to work

Bob Hostetler begins most weekdays at 4 a.m. on his home computer before heading to the office at 8 a.m. As a managing partner at an executive services firm in the Washington, DC area, he puts in a full day of work before heading home for the evening, where he often logs in a few more hours of networking.

What sounds like a grueling day in the budding career of a 30-something is actually a typical workday for 59-year old Hostleter – and retirement is nowhere on the horizon.

Hostetler is among a growing group of Americans redefining the “new normal” of the labor force: working retirement. A new report from the Sloan Center on Aging and Work at Boston College and Families and Work Institute found that 75 percent of workers aged 50 and older expect to have retirement jobs in the future. And unlike thousands of Americans worried about having a big enough nest egg to retire, not all of them are doing it to fill an income gap.

“These people aren’t slackers,” says Ellen Galinsky, president and co-founder of Families and Work Institute. “They’re working for multiple reasons: they want to have fun, they don’t want to be bored, they want to contribute.”

Hostetler represents a happy group of 50-somethings who are finding renewed satisfaction in careers that are challenging and offer an opportunity to work on their own terms after years in the workforce.

Among the study’s findings:

• 31 percent of those 50 and older say they would be bored not working.
• 75 percent of workers 50 and older say they’re interested in phased retirement, though few workplaces offer it.
• 18 percent are working to contribute and be productive.
• 15 percent have a job that is fun and enjoyable.