Save Money at Tax Time By Writing Off Your Job-Hunting Expenses
Tax time is upon us again. Are you paying more than you should be?
You may not have realized that you can deduct expenses related to your job search—and in fact, if you haven’t filed your returns yet, you can ask the IRS for a six-month extension to get everything in order. Here’s a rundown of some of the deductions you should be eligible for.
Resume services – If you’ve hired someone to help you craft your resume, or paid for a professionally-designed resume layout (like Loft Resumes,) hold on to your receipts: Any services related to creating and producing your resume or CV are tax-deductible.
Mailing expenses – Stamps are pricey these days. If you’re sending job applications out all over the state, carefully track what you’re spending on postage and mailing materials like manila envelopes and stationary. You’ll be able itemize these costs as well.
Travel expenses – If you caught a flight to New York for a job interview, you can deduct your plane and hotel expenses (though not the Broadway show you saw while you were there), whether or not you landed the job. And, even if you applied for a job 15 minutes away, you can deduct gas costs and parking fees for your trip into town. If you paid a babysitter or daycare center to watch your children while you were going on interviews, those expenses can be deducted as well.
Consultant and membership fees – If you hired a career coach or a recruiter to help you find work, any money paid for those services count as write-offs. Premium job site memberships, such as a LinkedIn Premium account or The Ladders, count, too, so don’t hesitate to subscribe to sign up for services that you think will help you find work. Want to join a trade group related to the field you’ve been working in? That’s tax-deductible, too, and it might help you gain some great leads on new career prospects.
However, certain job-seeking expenses aren’t deductible, such as:
Business attire and personal care services – Although you probably wouldn’t be buying a business suit and spending $100 on a new hair cut unless you had a potential boss to impress, costs for clothing and personal care and beauty services aren’t subject to deductions, so be careful how much you spend to make a good first impression.
Recreational club memberships - While it’s true that you might meet a great contact at the gym or the golf club, the IRS doesn’t believe that job-hunting is your primary purpose for signing up, so no deductions are possible.
The IRS also has some caveats about when any job-seeking expenses can be deducted: For instance, if you’re seeking a career in a new field, or you’re looking for your very first job, you’re not eligible for any deductions. In any case, the amount you can claim in tax breaks is limited according to how much you earned in the past year (assuming you earned anything). Check out the IRS’ Tax Tips for Job Seekers for more details, or talk to an accountant (also tax-decuctible) who can help you claim any deductions you may be eligible for.