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Tax Tips For Job Seekers

Articles > General Job Tips

This career article by Nathan Newberger gives job seekers some tips and things to consider when it comes to U.S. tax time.

That dreaded date is approaching very quickly. April 15th is just around the corner, which means it is time to file those tax returns. When economic conditions are tough, the last thing anyone wants to do is pay taxes. Luckily, you could be better off than you realize.

There are some very favorable rules embedded in the tax code for job seekers. When dealing with taxes, sometimes it pays to be between jobs.

This article briefly discusses some of the possible tax benefits for the unemployed. These are just tips that you may want to look into, please talk to a tax expert before filing your return. Don't pay more than you have to!

The following topics will be covered:

  • Basic Tax Deductions
  • The Big Bucks
  • Playing It Safe


Basic Tax Deductions

Many of the costs associated with a job search can be deducted from your income. As long as you are not entering the job market for the first time, searching for work in a different field of employment, or returning to work from a long spell of unemployment, many typical job search costs are tax deductible. Individually these costs can be small, but they can add up very quickly.

Eligible expenses may include:

  • Phone calls and faxing fees
  • Costs for typing, printing, and mailing resumes
  • Employment agency fees
  • Ad space in newspapers, trade magazines, or on web sites
  • Traveling costs for job interviews (This does not just include airfare or public transportation. The costs of driving to an interview can be deducted on a mileage basis.)


The list continues on, but you get the picture.

The 2 most important things to remember are:

  • These expenses are only deductible if you itemize them.
  • Only job search expenses exceeding 2% of your adjusted gross income are tax deductible. (please check with a tax expert on the finer details)


The Big Bucks $$


The deductions don't begin and end with your minor expenses. As well as the small costs of printing, postage, etc, large expenses associated with the job hunt can also be deducted.

The two primary "major expenses" are as follows:

  • EDUCATION - If you went back to school before taking a new job, your educational expenses can be curbed with tax deductions. Based on your adjusted gross income, you could be eligible for deductions of up to $3,000.
  • MOVING - Once you have finally found that new job, some of your moving expenses may be deducted for tax purposes. The only eligible expenses are ones that your current employer did not already cover. Furthermore, moving costs for a new job are only deductible if your new place of work is at least 50 miles from your old home. If these requirements are met, things like packing costs, mileage expenses, parking fees, tolls, and lodging while traveling are all tax deductible.


Playing It Safe

Tax deductions can be very tricky and very tempting. The worst idea you could get into your head is to start being a risk taker when it comes to your tax return. You may not always get caught bending the truth, but if you do, the IRS will have very little sympathy. Deductions related to the job search may also raise a bright red flag to the IRS. These types of expenses tend to get examined more thoroughly than others.

So as you file your return, keep these things in mind:

  • Don't get creative and try to pile on expenses that are not truly exclusive to your job search. For example, a new suit may be needed for interviews, but its usefulness is not strictly confined to your job search.
  • Save your receipts. In the case that your deductions do draw suspicion, you can save yourself a lot of pain, time, and money if you have proof of all your expenses.
  • CHECK WITH AN EXPERT. We here at Worktree.com are job search experts, not tax accountants. Before you file a return with new types of deductions, it would be smart to get professional advice.


CONCLUSION

Don't be afraid to try and save money, however, please speak to an expert if you have any questions. As long as you play by the rules and only deduct legitimate expenses, you are in the clear. Being out of work is an economic burden on its own. Money can be even tighter when you have to spend large amounts on your job search but these tips may help you recover a portion of this. Use those deductions to your advantage, and do it quick - April 15th is just around the corner!

About The Author
Nathan Newberger is the job and career expert at WorkTree.com. Nathan has over 10 years of experience in staffing and human resources. He has worked both as a recruiter and career counselor. Mr. Newberger has been the Managing Editor at WorkTree.com for the past 5 years and his articles have helped thousands of job seekers.

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