DEDUCT JOB HUNTING EXPENSES – TAX TIPS 101

DEDUCT JOB HUNTING EXPENSES – TAX TIPS 101


Even losing a job can have a silver lining: You can possibly DEDUCT Job Hunting Expenses! That’s right, the IRS may give you a tax break on your job search expenses, as long as you look for work in your current occupation.

Granted, the deduction is limited to the amount you spend that’s more than 2 percent of your adjusted gross income for the year, which is the number at the bottom of the first page of your 1040 form. So if you clear $40,000, you’ll still be on the hook for the first $800 in job hunting expenses, plus tax. Still, every bit of savings counts when you’re out of work, so save your receipts in case you clear the 2 percent hurdle.

Several types of job hunting expenses qualify for the deduction, including travel to and from job interviews; resume preparation and mailing costs; and any outplacement agency fees you pay that are not reimbursed.

Remember, you won’t get the deduction if you apply for jobs outside your current work, and you won’t get it if there is a substantial break between your last date of employment and the job search. How do you tell if the new job is within your current field? The IRS uses the U.S. Bureau of Labor Statistics Standard Occupational Classification System to categorize jobs. So if you have any doubt, look up your old job and your new job and see if they fall under the same classification.

Want more Tax Tips ? We’re love to help you save with overlooked deductions, DIY Self-filing tips and more for the 2012 Tax Season. See more in our Tax Tips 101 series HERE.

References:
Internal Revenue Service: Seven Tips for Job Seekers
Internal Revenue Service: Publication 529, Miscellaneous Deductions
U.S. Bureau of Labor Statistics: Standard Occupational Classification

Guest Post by Amy Kniss, Money Editor for eHow.com Ehow is an easy-to-use, solution-focused site with more than 30 categories that cover just about everything.

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