Job hunters allowed tax deduction

Income tax time is here. And if you're a job hunter, you need to be aware of the deductions available to you.

In the flurry of generating resumes, cover letters, phone calls and interviews, it's easy to forget the importance of documenting these efforts for the taxman.

According to Douglas Towne, taxpayer service specialist with the Internal Revenue Service, "Good record keeping is the secret to getting your best write offs."

An easy way to keep track of your expenses is to keep a log of your activities in a notebook. You can do this by simply listing categories across the top of each page (like mileage, printing, telephone and typing). Then record the dates vertically down the page. At the end of each day, jot down your expenses and save your receipts.

The following is a summary of the guidelines you should be aware of during your job search so that you can obtain the breaks designed for you.

Some exceptions
Whether you succeed in landing a job or not, many of the expenses you incur in seeking employment are deductible. The catch is that the job you are looking for must be in the same trade or business you held previously. A corporate executive or manager is considered a type of trade or business just like a carpenter or lawyer.

Your job hunting expenses are not deductible if you are seeking employment in a new trade or business, even when you get the job. So, if you are going after your first job as a college graduate, switching your trade or business or have been unemployed for so long (generally a year of more) that there is a "substantial lack of continuity" to your old job, you will be denied a deduction.

If you have been unemployed for a year of more there is a way around this general rule: Prove that you are actively looking. Keep up your memberships in professional organizations and keep careful records of your entire job hunting activities. If you do this throughout the year, there is a good chance you will be able to claim job hunting deductions.

The expenses of typing, printing and mailing your resume and other correspondence are deductible as a miscellaneous itemizes deduction.

Any fees charged by an employment agency or by firms that prepare your resume are also deductible, whether or not you find a job.

You can also claim long-distance telephone charges related to job hunting, but you must save your phone bill and circle the calls relating to your search.

If you travel to an area to seek employment, your expenses to and from this area are deductible from your gross income in computing your adjusted gross income.

Deductible expenses
Even if you travel somewhere primarily for a vacation, any actual expenses of your employment search at that destination are deductible. Your travel expenses to and from your vacation spot would not be deductible, however.

If you get a fob or start a business, which causes you to move to a new home, certain moving expenses are deductible from your gross income.

In order to qualify, your new job location must be at least 35 miles farther from your former home than your old job location was. To determine this, compare your new commuting distance to your old commuting distance. If your new drive is at least 35 miles more than the old one, you qualify.

Moving the required distance, however, doesn't necessarily guarantee your deduction. You must also work for a certain period of time.

If you are an employee (as opposed to being self-employed) you must work at least 39 weeks during the 12 months right after you move.

This 12-month period begins on the date you arrive in your new location, whether your family arrives then or not. It's not necessary that you work for one employer or that the 39 weeks be consecutive.

The key here is the "customary practice" of your particular occupation in your new location. For example, a schoolteacher who teaches on a full-time basis for more than six months is considered a full-time employee during the entire 12 months (even though school was not in session during the summer.)

Another caution: If you and your spouse file a joint return, you can't add the total weeks you've both worked to satisfy this 39-week requirement.

Some of the moving expenses you can deduct from your gross income during this first year are: the cost of transporting household goods (including shipping your car), and the costs of meals and lodging en route.

Towne says, "No receipts are necessary for gasoline purchases or meal expenses during this trip. However, you will need to save receipts for meals costing $25 or more per person, bills for lodging and for the moving company."

There are always exceptions in each individual's circumstances, so before you prepare your taxes, consult your tax advisor, the IRS or the publications available at the IRS office. 

Joan Lloyd is a Milwaukee based executive coach and organizational & leadership development strategist. She is known for her ability to help leaders and their teams achieve measurable, lasting improvements. Joan Lloyd & Associates, specializes in leadership development, organizational change and teambuilding, providing: executive coaching, CEO coaching & leader team coaching, 360-degree feedback processes, retreat facilitation and presentation skill coaching and small group labs. Contact Joan Lloyd & Associates at (414) 573-1616,, or 
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