Searching for a job does not come cheap. The good news is the expenses you incur may be tax deductible. If you pay for professional services to help with your resume, need additional training to secure a new job, or need help with your kids to go on interviews, you may be able to deduct these expenses. Of course, as is the case with anything else with the IRS, you have to read the fine print. There are only certain situations that you can deduct expenses.
Who Can Deduct Expenses?
Unfortunately, first-time job seekers are unable to deduct any job hunting expenses. New graduates must foot their own bill. Luckily, if you graduated from college or a trade school, there are likely free services available to you at your school to get you started.
If you already hold a job, however, you may be able to save some money. This is only true if you stay within the same industry, though. For example, an engineer looking to make more money or climb higher on the ladder as an engineer at another company qualifies. On the other hand, an engineer going back to school to become a teacher would not.
Expenses you Can Deduct
Anything to do with preparing your resume counts towards your deductions. Think of every cost that goes into preparing your resume. This includes the cost of the paper, the professional help in preparing it, and even the cost to deliver it. Keep track of everything you pay to create this snapshot of your employed life and deduct it on your taxes.
If you secure help in finding a job, such as with a head-hunter who charges you a fee, you can deduct these expenses as well. Even if you don’t use a head-hunter, but you secure some type of counseling to help you find the right type of employer or to narrow down your skills, you may still be able to deduct these expenses.
Traveling to job interviews can also add up. Whether you fly to another state or just rack up the miles on your vehicle, keep track of the expenses. If you have to stay overnight in a hotel or purchase food throughout your travels, keep the receipts and a log as you may be able to deduct them. This deduction depends on how far you must travel, however. Generally, it must be at least to another city in order to qualify.
If you take any type of courses in order to freshen up your skills, consider them tax deductible as well. Again, the job search must be in your own field, though. Due to the fact regulations and procedures are always changing, it is fairly common to brush up on your skills before interviewing in order to get a leg up on the competition.
What Else You Need to Know
Of course, there are maximum amounts you are allowed to deduct. While the IRS does not categorize the amount for each type of deduction, you can deduct the expenses that exceed 2 percent of your AGI (adjusted gross income.) You place the deductions in the Miscellaneous deduction section on Schedule A and you have to itemize your deductions in order to take advantage of this benefit. Make sure you have adequate proof of each expense, too. Don’t just use your credit card statement to prove you paid the expense. Keep every receipt and keep logs whenever necessary. Logs may pertain to the mileage on your car, the places you ate along with the dates, as well as any training or services you secured.