Dreaded tax time is here once again. If you’re like most, you are trying to find receipts for everything and anything you can use for a tax deduction.
If you happened to look for a job last year, I am happy to report you can write off your job hunt! While I am certainly not a CPA and encourage you to double check whether or not the specifics of what you want to write off are allowed, I’ll cover the basics of what is an isn’t allowed as a write off to get you started!
Outplacement, Career Coaching And Skill Building
If you hired an outplacement firm, sought training or career coaching to improve interview skills, networking skills or job hunt coaching, you will likely be able to write off these expenses. The primary catch is you have to be able to prove the activities were related to a job search. For most people this is pretty straightforward and easy to detail.
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Let’s face it, most people do not know how to write a compelling resume. The time is takes to write a resume, rewrite it and write it again is frustrating and disappointing for most. A professionally written resume allows you to relax, stop stressing and feel confident when you submit your resume for consideration.
Understanding most individuals will need help writing a great resume, Uncle Sam gives you the thumbs up to deduct this expense as well! From paying a Certified Resume Writer to create your resume, to the ink, paper and other marketing expenses related to submitting your resume, you can breathe easy knowing this is an expense that not only makes professional sense, but also gives back at tax time!
Travel And Meals
You can deduct any travel related expense connected to your job search. Yippee!
This includes airline tickets, mileage, car rentals, taxi rides, parking expenses, hotels and food. Taking someone out for lunch to network? Keep the receipt. Headed to a local chamber meeting to share your resume and network? Swing through Starbucks on the way and write it off!
Keep in mind, much like writing off the fees associated with networking events, club memberships or career coaching, you have to be able to show how your travel and dinning expenses related to your job search.
Because using snail mail is no longer an effective way to job search, Uncle Sam says you can deduct internet related fees. Wi-Fi costs, memberships to job boards, online training and services like LinkedIn’s premium membership can all be deducted! Sweet!
Taking care of the kiddos while you’re out interviewing can get pricey. Because you can’t take a child to an interview, costs associated with babysitting while you are job hunting are also deductible!
If your dream job lands you in a new city, the costs associated with moving can be deducted! Whether you pay a moving company or rent a U-Haul for a little DIY nightmare, make sure to save your receipts associated with relocation.
The rules surrounding relocation expenses can be a little wacky with things like meeting a specific job time requirement and moving at least 50 miles from your current home. Just double check the guidelines to determine what is and isn’t allowed. You can check out the IRS 521 for details on moving related expenses.
What Is Taxed
Severance pay, unemployment pay and any payments you received from benefits, unused vacation time and unused sick time are all taxable. If any of the above expenses such as relocation and outplacement services are paid by your employer or someone else, you cannot deduct the expenses. Personal items like a new suit, briefcase, dress shoes or a haircut are typically are not allowed as deductions either.
Also, all job hunt expenses must be relevant to your current line of work and relevant in timing. For example, let’s say you’re a VP of Sales but you decided you want to work as an astronaut, expenses to look for a job in a new industry or field are not covered. If you’ve been a stay at home Dad for two years and are ready to get back into the rat race, your timing won’t be considered relevant and therefore the expenses are not deductible.
The government wants to encourage you to find employment quickly, so if you’ve been out of the market or a chasing a career move that will be hard to navigate, you may not be able to write off all of the expenses. Keep your receipts anyway, because you may still have a few items you can toss in as a write off.
At the end of the day, take all the deductions you are legally allowed. If you’re currently looking for a job or plan to do so this year, be rigid about saving all of your receipts. If the IRS says you can write it off, do it! If there is any confusion about what you can and can’t include, seek out professional tax help. Happy taxes! – Jeanna
Launching A Job Search
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About The Author
Recognized nationally as an industry leader in resume writing and career coaching, Jeanna McGinnis, CPRW is a Founding Board Member at ReResumeMe and AVP, Career Strategy at A Players Executive Search Group Inc. Leveraging more than 15 years of experience directing hiring practices for multiple Fortune 100 companies, Jeanna and her team are refreshing how busy professionals brand, market and drive their careers. Please connect with Jeanna on LinkedIn or the ReResumeMe team on Twitter to simplify your career with updates on careers, job search and resume best practices!