Those nice folks at the IRS know job hunting can be stressful. As a reward for trying to find a job during this recession, they would like to give you some money for your efforts. All of the details can be found in their Miscellaneous Deductions publication [PDF], but here are some highlights:
Current Occupation Only
Make sure you are looking for a job that relates to your current occupation. Unfortunately, the IRS does not provide financial incentives for people who want to change career paths.
Agency Fees, Postage, Travel Expenses
If you are looking for a job that does relate to your current occupation and you are not a first-time job seeker, you can deduct the following expenses on your tax return:
- Employment and outplacement agency fees
- Money spent preparing and mailing copies of your resume to prospective employers
- Travel to and from a different location only if you went there primarily to find a new job. Hanging out on the beach in Florida only counts as employment travel if this is your current occupation.
Local Travel Too
Remember that the IRS also rewards you for looking for a job close to home, so keep track of any job-related meetings you attend.
- MapQuest provides an easy way to figure out the number of miles you logged for these meetings - simply type the "to" and "from" addresses into MapQuest and let it calculate the number of miles you drove.
- Multiply the number of miles you drove by $0.50 per mile (the standard IRS mileage rate for 2010) to calculate your tax deduction.
These deductions will be included in the "Job Expenses and Certain Miscellaneous Deductions" area of Schedule A (Form 1040) - Itemized Deductions.
The IRS even has a tax center to assist unemployed taxpayers.
And you never thought dealing with the IRS would give you that warm, fuzzy feeling!
Alison Hinson has over 20 years of experience helping business owners make intelligent decisions with their money. She provides corporate programs to help employees better manage their personal finances. In addition to consulting, she frequently writes, speaks, and creates webinars about various financial topics. Alison is the host of Money Talks, an award-winning radio talk show on WMPG, and co-host with Debi Davis of Mind Your Own Business, a show dedicated to all things small business, on WLOB. For more information about her business coaching and other services, visit AlisonHinsonMBA.com or call 207-671-1491.