Life Support - Tax Facts
Hunting for Tax Deductions? Job Searches Can Be Rewarding
A Tax Fact from The Tax Institute at H&R Block
In today's corporate America, changing jobs is commonplace. Cutbacks, layoffs and corporate ladder climbing can all lead to a search for other employment. But the once dreaded job search now has an upside - tax deductions! Job search expenses can be deducted as miscellaneous itemized deductions if you look for a job in the same field at essentially the same level as the one you left. And, the expenses are deductible even if you don't get the job.
You can claim unreimbursed job-seeking expenses as long as the amount of all miscellaneous itemized deductions is more than two percent of your adjusted gross income. Job seeking deductions are also subject to the overall limitation on itemized deductions based on AGI threshold amounts. To figure your deduction, on Schedule A, subtract two percent of your adjusted gross income from the total amount of these expenses. Your adjusted gross income is the amount on Form 1040, line 38.
Just what deductions can be taken?
To qualify for a deduction, your job search must be for a job in your current, or most recent, trade or business and should be at a similar level of responsibility with duties similar to those of your most recent job.
Thinking of a Vacation?
If you take a personal trip and happen to do some job hunting while on that trip, only the expenses specific to the job hunt in the destination location will be deductible. Travel to and from the location and lodging and meals while there will not be deductible. Best advice: Avoid unnecessary job-hunting trips to vacation spots.
This Tax Fact is brought to you by The Tax Institute at H&R Block.
To view other helpful tax information or listen to our Tax Fact podcasts, visit www.digits.hrblock.com
As always...everyone's tax situation is different, so be sure to consult a tax professional or financial advisor before making important financial decisions.
This Tax Fact is for educational purposes only and is not intended to be a substitute for seeking personalized, professional advice, nor is it intended to be used to avoid IRS penalties.
A Tax Fact from The Tax Institute at H&R Block
In today's corporate America, changing jobs is commonplace. Cutbacks, layoffs and corporate ladder climbing can all lead to a search for other employment. But the once dreaded job search now has an upside - tax deductions! Job search expenses can be deducted as miscellaneous itemized deductions if you look for a job in the same field at essentially the same level as the one you left. And, the expenses are deductible even if you don't get the job.
You can claim unreimbursed job-seeking expenses as long as the amount of all miscellaneous itemized deductions is more than two percent of your adjusted gross income. Job seeking deductions are also subject to the overall limitation on itemized deductions based on AGI threshold amounts. To figure your deduction, on Schedule A, subtract two percent of your adjusted gross income from the total amount of these expenses. Your adjusted gross income is the amount on Form 1040, line 38.
Just what deductions can be taken?
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1. Employment agency fees:
- If your new employer repays your agency fees, you must include the amount in your gross income up to the amount of the deduction you claimed earlier.
- If your employer pays fees directly to the agency and you have no responsibility for them, you do not have to include them in your gross income.
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2. Resume preparation:
- Typing and printing
- Postage
- Toll telephone calls
- Advertising
- Photographs (if required for your resume in your trade or business)
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3. Travel for job search:
- Airfare or mileage (in some circumstances actual automobile expenses have been approved)
- Lodging
- Meals (based on either actual expenses or standard federal per diem rates)
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4. Legal fees protecting employment status
To qualify for a deduction, your job search must be for a job in your current, or most recent, trade or business and should be at a similar level of responsibility with duties similar to those of your most recent job.
- If you have not held a job in that trade or business for an extended length of time, your job search will be considered for a new trade or business and your deductions may not be allowed.
- If you held a college internship or valid job while in college and your search is for a job in the same trade or business, you will be able to take the job search deductions.
- If you are just out of school and had no similar paying jobs in school, you are looking for a job in a new trade or business and your deductions will not be allowed.
If you take a personal trip and happen to do some job hunting while on that trip, only the expenses specific to the job hunt in the destination location will be deductible. Travel to and from the location and lodging and meals while there will not be deductible. Best advice: Avoid unnecessary job-hunting trips to vacation spots.
This Tax Fact is brought to you by The Tax Institute at H&R Block.
To view other helpful tax information or listen to our Tax Fact podcasts, visit www.digits.hrblock.com
As always...everyone's tax situation is different, so be sure to consult a tax professional or financial advisor before making important financial decisions.
This Tax Fact is for educational purposes only and is not intended to be a substitute for seeking personalized, professional advice, nor is it intended to be used to avoid IRS penalties.
