Financial

Job-seekers and the tax deductions they can make use of

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Whether you are looking for another opportunity or a laid-off employee looking for a job, any help you can get with money is more than welcome. You can be surprised to know that this help will come from not your family, not your friends but from the Internal Revenue Service. You should know that the IRS provides tax deductions for job-seekers. You can include your job-hunting expenses under your itemized list of deductions which will reduce your taxable income and decrease your tax bills. Another good news is, you can claim them regardless of whether you got the job or not. Just make sure that you meet the requirements which are listed below:

1. To make your job-hunting expenses qualify as deductions, they should be equal to at least two percent of your total gross income.

2. If you are planning to switch to a different field, unfortunately you cannot qualify. Therefore, you must be planning to work in the same field.

3. Fresh graduates are not entitled to these tax deductions as well. Only those who are previously employed even if they were part-time can take advantage of the tax deductions.

4. Make sure that you start your job search immediately to qualify for the tax deductions. The IRS will overlook the expenses you incur after a substantial break.

5. Deductions have limits so you might want to check out their website or seek the help of a tax consultant to make sure.

If you met all the requirements listed above and know that you are qualified for the tax deductions, then you will need to take a look at the items listed below which are items that can be included in your itemized list of deductions.

1. Employment services- Often times, people looking for a job overlook the need for employment services because of the high costs; however, they can really help with landing you a job much faster and easier. Fortunately, job-seekers making use of these services can deduct the fees associated with job placement services and head hunters. You can even deduct the fees required if you decide to place an ad in newspapers or in websites.

2. Resumes- Costs associated with your resume including printing, copying, mailing, hiring professional resume services can also be tax deductible.

3. Communication- When you are using your phone and making local or long-distance calls to inquire about a job or because you had to be interviewed, the costs incurred to make that possible are deductible. Keep in mind though that your entire phone bill will not be tax deductible, only the portion which was related to your employment search.

4. Seminars, training and conferences- Seminars, training and conferences, you attend while job hunting can also be deductible. If there are other events that you attended to increase your chances of getting a job, you can write off those costs as well.

5. Travel- Now, this part will need a little extra effort from you because you will need to compute for everything. If you are going to travel for a job interview, the IRS offers a $0.55 deduction per mile that covers job interviews, networking events and other job-related trips. You can even include parking fees. If you are commuting, the costs, in full, can be deducted. Hotel and lodging costs can also be included as deductibles while you can write off 50% for every meal.

6. Childcare- When you seek for child care services while looking for a job, you can take advantage of the child and dependent care credit which covers up to 35% of your day care or baby-sitting costs. While this is not actually a tax deduction, it helps in reducing the amount you have to pay instead of reducing your taxable income. You have to make sure though to have the provider’s Social Security number or the Employer Identification number in order for you to qualify.

Any person who is out of a job and is looking for one will totally welcome any help he or she can get with money. Although the IRS will require some documents from you to prove that the items listed in your deductibles are legit and qualified, there is no doubt that it will relieve you of high taxes and help you ease, even a little bit, your financial situation. Just be honest and make sure that you write off only the items that are qualified to avoid any problems. Checking your credit reports will also be of big help during your job search as they will contain a list of your expenses which you can refer to, to easily make a list of your deductibles.


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