It’s tax time (yikes!). If you haven’t worked in the past few months but have been searching for a job, there could be some good news for you: some expenses related to your job search are tax deductible.
First, the bad news… sometimes you can’t deduct expenses. For instance:
- Career Changes: Your job hunting expenses are only deductible if you are looking for a job in your current field; if you are switching careers, your expenses can’t be deducted (and that’s probably when you need the deductions most, right? Argh!).
- Your First Job: You cannot deduct expenses related to your first job.
- Gaps in Your Employment: If you take a significant break between jobs, you may not be able to deduct expenses. The IRS doesn’t have a specific limit on how long you can go between jobs, but PLEASE, err on the side of caution here.
- Your Total Expenses: The total of your miscellaneous deductions, including job-search expenses, must exceed 2% of your adjusted gross income.
And now, the good news. If you still qualify, the following expenses are tax deductible:
- Employment and outplacement agency fees.
- Resume Services (yay!)
- Related printing and mailing expenses
- Agency and want-ad fees
- Phone charges (interviews, agency phone calls, etc)
- Travel, including out of town trips for interviews, etc.
As with all your tax-related info, it’s important to keep careful track of your expenses while you pound the pavement looking for your new job. Keep all your receipts and careful records so that you can itemize your expenses on your tax form. If you’re in doubt, stay conservative and don’t deduct too much, so you don’t raise any red flags with the IRS.