It may not seem like an upside but you may find some comfort in carefully reviewing what you can and can not deduct from your taxes as a result of your job search. With a few weeks left before the end of the year, now is the time to review items for possible deductions. Gathering and organizing the information now will not only make tax time easier, it may give you some peace of mind.
As always, consult a tax professional to make sure you are complying with tax law. Here’s a link to IRS Publication 529. Here are a few things to consider:
1) If you’ve taken a “substantial break” between your last job and when you started looking for a new job, you may be out of luck in terms of deducting job search expenses. Also new grads are not eligible.
2) If you’ve started your own business, you may have some additional deductions, make sure you check with your accountant.
3) Here are few job search expenses that may be deductible:
• Employment and outplacement agency fees
• Resume services
• Printing and mailing costs of search letters
• Want-ad placement fees
• Telephone calls
• Travel expenses, including out-of-town job-hunting trips
Here’s a short video that explains a few key points in the tax deduction equation.
4) A review of the 2009 stimulus bill shows that up to $2,400 of unemployment benefits may be tax-free (Federal Taxes only).
May everyone find a good job soon. Happy Thanksgiving.