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This article is not intended to provide tax or legal advice for preparation of tax returns but provides possible expenses that may qualify as a deduction. Consult your tax preparation advisor or the Internal Revenue Service for confirmation of the deductibility of expenses based on your personal situation.
If you’re part of the millions that have yet to file their income tax returns, remember to review your job searching expenses from 2009 as they can provide valuable deductions. And, if you’ve only begun job searching, be sure to keep track of your 2010 expenses as incurred so that you are not trying to remember what they were when preparing next year’s return.
The types of expenses that may qualify as a deduction are:
• Resumes – amounts spent on typing, printing and mailing
• Job Search Websites – subscriptions and costs associated with resume
• Outplacement or Employment Agencies – fees that have not been paid or reimbursed by your previous employer
• Phone Calls –local and long distance calls
• Unreimbursed Travel and Transportation – provided the trip is primarily to search for a job in your present line of work. Even if you cannot deduct the travel expenses to and from an area, you can deduct the expenses of looking for a new job in your current line of work while in that area. If travel is by car, the 2009 business mileage rate is 55 cents per mile.
The following are some key points to remember:
1. Your job search (whether employed or unemployed) must be in the same line of work.
2. You can claim the amount of miscellaneous expenses that exceeds 2% of your adjusted gross income.
3. Expenses are only allowed if you itemize them.
The above expenses cannot be deducted if you are looking for a job in a new occupation, a significant break exists between your last job and searching for a new job, or you are looking for a job for the first time.
In addition, unreimbursed business expenses such as journal / trade subscriptions and association dues may be deductible. And, if you land a job in another city (at least 50 miles from your former residence) and all of your relocation costs are not reimbursed, portions of your moving costs are deductible.
If you’re unemployed, remember on the income reporting side that you need to report unemployment compensation, severance pay, bonuses, 401K and/or other pension distributions as income. Remember to keep receipts, avoid over-exaggerating the extent of expenses and consult a tax advisor before filing your return.
See IRS Publication 529 for a complete summary of miscellaneous deductible expenses.
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