Job searches can bring you may tax deductions you may be completely unaware of.
Knowing the Tax Law can save you valuable tax dollars.
Job search expenses can be tax deductible if you know them.
What you should know about deducting costs related to your job search:
1. To qualify for a job search deduction, your expenses must be spent on a job search in your current occupationn. Highlight this if not, this could be a potential IRS audit issue. You may not deduct expenses you incur while looking for a job in a new occupation.
2. You can deduct employment and outplacement agency fees you pay while looking for a job in your present occupation. Keep all receipts.
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 earlier year.
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.
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 traveled.Keep a travel log.
You may 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. Another key hot point with the IRS. What is substantial break?, up to the IRS
6. You cannot deduct job search expenses if you are looking for a job for the first time.
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.
