Job hunting can be expensive. The costs of hiring career coaches, printing hundreds of résumés at Kinko’s and flying out for weekend job interviews can really add up, especially for someone who doesn’t have an income.
But finally, there’s a benefit to being unemployed. Job seekers can deduct search-related expenses, including employment and outplacement agency fees, travel costs and résumé costs.
Your job search doesn’t even have to result in employment for you to qualify.
“The government is in favor of people finding work and understands that it takes a little money to get there,” said Matthew Rothenberg, editor in chief of TheLadders.com, an online job marketplace. “Looking for a job is now your job, and the government recognizes that.”
Do you qualify?
Not every workplace hopeful can deduct job-related expenses. You’re eligible for these deductions only if you’re seeking a job in your present field of work, you aren’t looking for your first job and you aren’t entering the job market after a “substantial” period of unemployment, according to the IRS.
That means career changers, recent grads, and stay-at-home parents returning to work are out of luck.
This “substantial” period of unemployment is one of the so-called gray areas of the tax code, said Tom Karsten, managing partner of Karsten Tax & Financial Management.
“What I usually look at is if during that whole period of time, the person was actively looking for work,” he said. “It’s not an area [the IRS] would look at too closely as long as the costs are reasonable and it isn’t a really long period, like five years or more.”
To claim job search expenses, you just need to itemize them on your return.
But because knowing what qualifies for a deduction can get complicated, it’s always a good idea go to an accountant or tax expert with any questions.
Will move for work
Traveling across the country for an interview? Make it worth your while by writing off the plane ticket or gas costs and getting some money back.
If the interview is over the phone, you can deduct the cost of the call as well.
Even if you travel somewhere without an interview lined up but you’re still looking for work, you can claim items such as airfare costs, gas expenses and other transportation fees.
“If you were in a different city for interviews, document who you spoke to, what the company was and where it was located as well as the total number of appointments you had while you were in that city,” Karsten explained.
FULL STORY: http://money.cnn.com/2010/03/05/pf/taxes/tax_exemptions_unemployed/index.htm
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