Job searches can turn into expensive ventures. Nevertheless, the IRS gives you the chance to make tax deductions on the cost of searching for a new job. Before you begin deducting travel expenses, here are some tips to make sure you are deducting only what’s valid.
Job search expenses can only be deducted if it’s related to your current occupation. It can’t apply to a career change, so you have to be searching for the same job in a different company. Anything else is invalid.
What Can You Deduct?
For a full list, consult a tax advisor or visit the IRS website. Here’s a brief overview, though:
- Preparing and sending resumes.
- Travelling to and from interviews.
- Creating and preparing a website.
- Printing business cards.
Employment agency fees are fully tax deductible while searching for a job in your current occupation. However, you must declare whether your new employer refunds these fees or not.
Travel expenses can be deducted, but only if the trip is purely to find work. You can deduct lodging, 50% of the meal expenses and entertainment expenses. However, do be careful because the IRS is really clamping down on vacations to Vegas because you were ‘searching for a job.’
If you took a substantial leave between jobs, you’re unable to claim any tax breaks on searching for a new job. This is where there’s a significant gray area, so do consult with an expert if you did take a short break between jobs.
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