When I was a teen, I landed a job installing car stereos. It was the coolest job on earth because I was trained, paid well, and eventually had the best possible stereo system in my car at a wholesale cost. Never mind the fact that I was working for a “violent psychopath.”
If you are looking for a job, here are some tips:
1. To qualify for a deduction, your expenses must be spent on a job
search in your current occupation. You may not deduct expenses you incur while
looking for a job in a new occupation. So, if you are an engineer looking for a job as a nurse, forget the deduction. But, if you are an ER nurse looking for a job as a surgical nurse, you may have a deduction.
2. You can deduct employment and outplacement agency fees you pay while
looking for a job in your present occupation. If your employer pays you back in
a later year for employment agency fees, you must include the amount you
received in your gross income, up to the amount of your tax benefit in the
3. You can deduct amounts you spend for preparing and mailing copies of
your resume to prospective employers as long as you are looking for a new job
in your present occupation. This expense isn’t as costly as in previous generations since so many use E-mail to send resumes.
4. If you travel to look for a new job in your present occupation, you
may be able to deduct travel expenses to and from the area to which you
travelled. You can only deduct the travel expenses if the trip is primarily to
look for a new job. The amount of time you spend on personal activity unrelated
to your job search compared to the amount of time you spend looking for work is
important in determining whether the trip is primarily personal or is primarily
to look for a new job.
5. You cannot deduct your job search expenses if there was a
substantial break between the end of your last job and the time you begin
looking for a new one. This is a tough call. Consult your tax advisor.
6. You cannot deduct job search expenses if you are looking for a job
for the first time. If you are just starting out, ignore this article.
7. The amount of job search expenses that you can claim is limited. To
determine your deduction, use Schedule A, Itemized Deductions. Job search
expenses are claimed as a miscellaneous itemized deduction and the total of all
miscellaneous deductions must be more than two percent of your adjusted gross income.
8. When you do land a new job, don’t forget about the possible deduction for costs in relocating and moving.
As, always, each tax situation can be different. So, consult your tax advisor before making any decisions.
For more information about job search expenses,
see IRS Publication 529, Miscellaneous Deductions.
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