There aren’t to many silver linings around the dark cloud of job hunting, but using it as a tax deduction may brighten this year’s tax season. Some job search expenses are eligible deductions and could cut your taxes at a time when every penny saved counts.
The first step in determining what you can deduct is to make certain you fall into the “eligible”
• Be seeking a new job, but in the same field. If you are going in a completely different direction, the tax breaks do not apply.
• Not have been out of work for a “substantial break”. For example, stay-at-home moms who choose to return to work after several years off cannot use these deductions when they want to go back into the workplace.
• Not be a recent graduate. If it’s your first job out of school, these deductions do not apply.
If you’ve determined that you do qualify for job search tax deductions, following are some expenses that you can deduct:
• Employment agency fees
• Resume writing services
• Cost of printing and mailing cover letters and resumes
• Long distance phone calls
• Travel expenses if you are job hunting in other cities
• Resume distribution from services like JobsByFax
It’s not as simple as just deducting the expenses from your income... Uncle Sam never makes it that easy! The job hunting expenses must be itemized and the total must exceed 2% of your adjusted gross income. You can only deduct the amount over 2%. And, as always with itemized tax deductions, keep track of all receipts as back-up in case of an audit.
