Job Hunting Expenses
Candlefocus EditorWhen entering the job market, job seekers often face numerous expenses, and for those who are already unemployed or underemployed, these costs can be overwhelming. It is important to recognize, however, that job hunting expenses are a legitimate tax deduction. Therefore, it is in a job seeker’s best interest to track their associated costs.
The Internal Revenue Service allows job hunters to deduct costs related to their search, including travel and lodging expenses associated with attending jobs fairs, transportation costs when attending interviews, the cost to make copies of your resume and cover letter, buying new clothing for interviews and any costs associated with attending workshops, special classes or training related to your job search.
In order to take advantage of these deductions, you must be actively searching for a job in your current occupation. Furthermore, deductions are capped at two percent of your adjusted gross income. Therefore, it is important to have accurate records of your expenses.
Job seekers should keep accurate records of job search expenses, such as receipts, lists, photos and other documentations, to verify the legitimacy of the deduction. Additionally, job seekers should also be aware that these deductions are subject to limitations. For instance, home office expenses, which could include computer equipment, office supplies, Internet or telephone charges, or other related expenses, are not valid deductions.
Finally, if employer reimburses you for your job hunting expenses, the amount you are reimbursed will reduce the deduction you can take. This is because you already received the money for the expenses and it is considered taxable income.
In conclusion, job hunting expenses can be a significant portion of the cost of landing a new job and unfortunately, many job seekers are unaware they're eligible to deduct them. However, with the proper documentation, job hunters can benefit from having their job search expenses as valid tax deductions.