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Tax Tidbit 6/09: Job Hunting Expenses

Tax Code allows you to deduct expenses that you may incur for searching for a job in your field. Some of these expenses may be obvious; others are not. This letter describes those expenses. 

The costs of typing and printing your resume are valid deductions. Postage and long distance telephone calls can be deducted. The cost of travel to a job interview can be deducted. In this regard, it is important to remember that the automobile mileage expense changes every year. For 2009, it is 55 cents-per-mile.  Air or rail fare can also be deducted. If you utilize the services of an employment agency, that cost can be deducted, as can the costs of job counseling and referral services. Remember to keep records of all these costs because although some may be minor, together they may add up to a significant amount. It does not matter if your job search is successful or not. 

However, the above deductions cannot be taken if you are searching for a job in a new field. For example, a professional photographer who seeks to change his or her career path and pursue a new job in the health care industry cannot deduct any of his or her job-hunt expenses. 

Just what constitutes a "new field" is not necessarily intuitive; the IRS has held that different types of jobs in the same employment sector are jobs in different fields, and job search expenses were not deductible. Exceptions to this rule do apply, however. The IRS allows retired servicemen and women to search for jobs in new fields and still claim these job-search deductions. And temporary jobs you take while searching for permanent employment in your field will not affect the deductibility of your job search expenses. 

Persons, such as college students, entering the job market for the first time cannot deduct their job-search expenses. If, however, a college student has worked in his or her chosen field while attending college, post-college job search expenses may be deductible. If a jobseeker has been out of the workforce for a long period of time, the costs of searching for a job are not deductible. This rule may particularly affect parents who take time off work to raise their children. 

Job-search expenses are itemized deductions. Therefore, if you take the standard deduction, you cannot claim them. Moreover, job-search expenses are subject to the Tax Code's overall limitation on itemized deductions.  If you would like additional information about the deductibility of job hunting expenses, please contact Andrew D. Ross, CPA of Bedard, Kurowicki & Co., CPA's, PC (908) 782-7900 x 113, adr@bkc-cpa.com, or visit www.bkc-cpa.com.