Tips for Deducting Job Hunting Expenses
You can’t get experience without a job, and you can’t get a job without experience; but did you know you can’t get a job without spending money? Job hunting can set you back a pretty penny, but there is a reprieve.
Some job hunting expenses may be tax deductible and others won’t. Navigating through the rules can be tricky. Planning and documenting your expenses during this process can prove rewarding come tax time. So keep every receipt and invoice related to your job hunt. But realize that not all job hunting expenses are tax deductible.
You must be searching for a job in the same occupation you are in, or were previously employed in. This means you can’t claim your search expenses if you are planning a career change. High school and college graduates are out of luck too, unless they worked enough days and hours while they were a student to establish an occupation.
The most important thing to remember when you are planning to deduct your job hunting expenses is to document everything; from employment agency fees, resume preparation, copying, postage and long-distance phone calls to even some travel expenses, if your main purpose of the travel is for your job search.
There is a catch in deducting your job hunting expenses. Not only do you have to itemize your expenses during your tax preparation, but you are only allowed to deduct the expenses if they are more than 2% of your adjusted gross income — and for most itemized filers, they won’t qualify for any benefit, but it does not hurt to try. Happy deducting!
About the author: April Lewis-Parks is the director of education for Consolidated Credit and a consumer affairs advocate. She is dedicated to generating awareness about personal finance. She is on the education advisory committee of the JumpStart Coalition, which is dedicated to furthering financial literacy to the youth and she is active in the South Florida chapter of Junior Achievement which promotes entrepreneurship and financial literacy through experiential, hands-on programs.