Tax Time Tips for Job Hunters

Job hunting can be a strenuous and sometimes downright depressing but, it does have its advantages when it comes to tax season. Knowing what you can (and cannot) deduct when it comes to filing is important. Here are a few pointers:

Travel Expenses – Traveling to interviews can take a real bite out of your budget but, much of it can be claimed back on your taxes. There are some rather confusing IRS rules you have to keep in mind though. If the sole purpose of your trip is to obtain new employment then everything – flight, meals, hotel rooms – can be deducted. However, if you went to Hawaii on vacation and decided it was so wonderful you cannot imagine leaving and then decide to look for a job, none of the expenses are deductible.  Reason being the original purpose of your trip was pleasurable in nature. However, you can still deduct the cost of actually getting to the interviews (bus, rental car, etc.)

Career Counseling, Resume Preparation – Any services you have paid for to help improve your chances of gaining employment should be tax deductible. You can also claim for the cost of “advertising your services” if you have paid for a membership to any job hunting websites or recruiting services.

Time Online – As long as you keep good records and track the amount of time you spend on the Internet searching for a job you should be able to deduct a portion of your internet service bill and in many cases some of your cell phone bill as well if you are using it in your job search.

Things you cannot claim include clothing purchased for interviews and their laundering. It is rare that a first time job seeker (ie a new college graduate) can deduct any of their job search expenses, unless they are transitioning from an unpaid internship to full time work. If you have been out of work for many months the number of job search deductions you can claim are significantly reduced as well.

To make sure you get all the deductions you are entitled to have your taxes professionally prepared or use a good tax preparation software like Turbotax. Job seekers tend to need to hang on to every penny they can, so don’t miss out on the breaks that Uncle Sam is offering you.

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