Posts Tagged ‘job search expenses’

Deducting the Expenses of Your Job Search

Friday, July 29th, 2011

Looking at the unemployment rate table below which is from the U.S. Department of Labor’s Bureau of Labor Statistics you can logically conclude that our unemployment rate has been in the “unacceptable” range for over a decade now and, as of today,  the outlook for the future is not very encouraging.

Year Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Annual
2001 4.2 4.2 4.3 4.4 4.3 4.5 4.6 4.9 5.0 5.3 5.5 5.7  
2002 5.7 5.7 5.7 5.9 5.8 5.8 5.8 5.7 5.7 5.7 5.9 6.0  
2003 5.8 5.9 5.9 6.0 6.1 6.3 6.2 6.1 6.1 6.0 5.8 5.7  
2004 5.7 5.6 5.8 5.6 5.6 5.6 5.5 5.4 5.4 5.5 5.4 5.4  
2005 5.3 5.4 5.2 5.2 5.1 5.0 5.0 4.9 5.0 5.0 5.0 4.9  
2006 4.7 4.8 4.7 4.7 4.6 4.6 4.7 4.7 4.5 4.4 4.5 4.4  
2007 4.6 4.5 4.4 4.5 4.4 4.6 4.7 4.6 4.7 4.7 4.7 5.0  
2008 5.0 4.8 5.1 4.9 5.4 5.6 5.8 6.1 6.2 6.6 6.8 7.3  
2009 7.8 8.2 8.6 8.9 9.4 9.5 9.5 9.7 9.8 10.1 9.9 9.9  
2010 9.7 9.7 9.7 9.8 9.6 9.5 9.5 9.6 9.6 9.7 9.8 9.4  
2011 9.0 8.9 8.8 9.0 9.1 9.2              

 Source:  http://data.bls.gov/timeseries/LNS14000000

In almost all of the cases,the person who is now looking for a new job bears no responsibility whatsoever for being in this situation.  However, there are provisions under the existing income tax laws that will allow you to deduct some or all of your job search expenses.

From the IRS website:  You can deduct certain expenses you have in looking for a new job in your present occupation, even if you do not get a new job. You cannot deduct these expenses if:

  • You are looking for a job in a new occupation,
  • There was a substantial break between the ending of your last job and your looking for a new one, or
  • You are looking for a job for the first time.

Keep accurate, detailed records (including receipts and documents) for all of your expenses including the dates, purpose for the expenses, and the person or persons with whom you met.  Your job search expenses are reported in the “Miscellaneous Deductions” section of Schedule A (“Itemized Deductions”).  Additionally, to receive a tax benefit for these expenses the total deductions in this section must be greater than 2% of your total adjusted gross income. 

Additional information and details are provided in IRS Publication 529, “Miscellaneous Deductions” which can also be obtained using this URL:  http://www.irs.gov/pub/irs-pdf/p529.pdf .  If you can not obtain the information that you require, or if you need to have specific questions answered, call the Internal Revenue Service at 1-800-829-1040.  (more…)