Looking For A Job? Don’t Forget The Tax Deductions!

In this tough economy, a number of people are looking for jobs. If you’ve spent some time and effort — and money — on your job search this year, you might be eligible for a few tax breaks. Indeed, many of the expenses that you are likely to incur during a job search are tax-deductible.

Job Search Tax Deduction

Can You Deduct That Job Search Expense?

Before you get excited, though, you need to be aware of the caveats. First of all, you can’t deduct job search expenses if you have had a long break since your last job. So, if you were laid off, and then unemployed until your benefits ran out, you aren’t going to be able to take the tax breaks. You need to be actively looking for a job within a short period of time after leaving your last job if you want the tax deductions.

Also, you can’t deduct expenses if you are looking for your first job, or if you are changing careers. You have to be searching for a job in the same field, and you can’t be fresh out of college.

If you meet the qualifications, you can start adding up the expenses related to your job search. Some of the qualifying expenses include:

  • Travel: If you fly or drive to another city to look for a job, you can count those expenses. Travel expenses include flight, mileage, hotel costs, and even a portion of networking meal costs. However, if you take a day trip somewhere fun, those expenses aren’t deductible. Make sure that you only deduct the travel expenses directly related to your job search and the interviews you participate in.
  • Fees paid to employment agencies: If you pay a head hunter, career coach or employment agency a fee to help you find a job, you can deduct those costs. However, you do need to be careful. If your employer reimburses you for your employment agency expenses, you can’t take the deduction. If you take a deduction in one tax year, and your employer reimburses you in another tax year, you are supposed to report the reimbursement, up to the amount you deducted, as part of gross income.
  • Resume services: If you pay fees to have a professional help you with your resume, that is tax deductible.
  • Printing and mailing costs: Costs associated with printing your resume and mailing it out, or mailing other application materials (such as cover letters and letters of recommendation), can be deducted when you prepare your tax return.
  • Calls: If you make phone calls to potential employers, and you incur costs to call them, you can deduct those expenses.
Remember, though, to keep good records. Make sure you save receipts, and make notes of the job search activities you engaged in. You will need to keep copies of your records with your tax return so that they are handy if the IRS decides to audit you. It can help to talk to a tax professional or an accountant before you deduct your job search expenses. You want to make sure you are on the right track, and deducting appropriate expenses.
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Miranda is a freelance writer and professional blogger. She writes for a number of personal finance blogs, including Planting Money Seeds. She has a M.A. in journalism, and is the author of Confessions of a Professional Blogger. Miranda lives Utah, where she enjoys spending her free time reading, traveling and playing with her son and husband.

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Comments

  1. says

    There’s just too much to handle when dealing with taxes. But it’s good to know these stuff especially if you want to save some money while you do not have a steady job. Your receipts will save you! lol

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