Job Hunting and Tax Deductions

It’s probably one of the most overlooked of valuable tax deductions: job search expenses. You see, the government wants you to work, and preferably at a well-paying job. The more money you earn, the more the government gets to claim in taxes. When you aren’t working, you have no income to tax. If you aren’t working, you aren’t receiving a paycheck which means that you aren’t paying taxes either. You also have no income to buy things so you also don’t pay many other taxes either. To that end, the government has decided that allowing you to deduct some of your expenses for your job search is a good idea. Which can be a good idea for you too!

Naturally, there are certain rules that apply to taking these deductions. For starters, you have to be looking for a new job in the same general career field. This means that recent graduates looking for their first job are out of luck (though a paid internship in the same field may qualify.) You also have to have begun looking for a new job immediately. So, when you find yourself in a position where you have lost your job or been recently laid off, you will want to start your job hunt process immediately. The IRS also stipulates that the job search expenses have to amount to 2% of your adjusted gross income or more.

Once all of that is met, you can write off employment agency and outplacement agency fees, resume services, printing and mailing costs of sending resumes and cover letters, want-ad fees, telephone calls and out-of-town travel expenses. These expenses are classified as miscellaneous itemized deductions and are listed on line 21 of schedule A. Because they are itemized, it’s extremely important to track expenses carefully and save receipts. I suggest keeping a spreadsheet of all of your expenses and then filing all of the job search related expenses in their own folder in your filing system.

If you find yourself looking for a new job in your old field, taking job search deductions might be just what you were looking for to improve your financial outlook. This can help alleviate some of the stresses that arise when you find yourself needing to look for a new job.

Note: Since I am not a CPA or a tax attorney, I cannot give you tax advice. Consult with your tax professional before making any decisions about your tax deductions.

About the author

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Erin Kennedy

Erin Kennedy, CPRW, CERW, BS/HR, is a Certified Professional Resume Writer/Career Consultant, and the President of Professional Resume Services. She is a nationally published writer and contributor of nine best-selling career books.

   

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