Many Americans are out of work and looking for employment. One bonus of your job quest is the ability to deduct job search expenses from your taxes. The Internal Revenue Service (IRS) has a distinct set of guidelines to qualify for these specific deductions.
Same Field Of Employment
You are required to be searching for employment in the same line of work. You may only deduct expenses on your taxes, if you are staying within the same job field. If you are switching careers, your expenses are ineligible for a tax write-off.
Fees From Job Agencies
If you sign with an employment agency, you are authorized to deduct any fees incurred when you enrolled with the agency. Many employers offer new hires reimbursement for the monies spent at an employment agency. If your new employer reimburses you for your agency fees, you are required to include this as income on your next tax return.
Preparation, Phone and Mail Expenses
Resume preparation, phone and mail costs are included in the list of eligible deductions. This is only true, if you are looking within the same line of work. The expense of any long distance calls, printing, preparing and mailing your resume any potential employers are eligible for a tax deduction.
Travel expenses you incur while interviewing for a new job are tax deductible. Deducting travel related expenses is only allowed under a few key circumstances.
- The trip must be primarily job search related.
- How much time you spend on your job search, in relation to the amount of personal time you spend in the area, plays a vital part in eligible deductions for travel expenses.
- Only travel related expenses to and from your area of residence is allowable.
Disqualifications For Job Related Tax Deductions
- First time job seekers are unable to claim a deduction for job search expenses.
- A significant time gap between your prior job and your new job search.
The IRS requires your job expenses to reach a certain threshold before expenses are deductible. In order to be eligible, your job search related expenses must exceed two percent of your adjusted gross income.