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Your Job Search Expenses May Be Tax-Deductible

Your Job Search Expenses May Be Tax-Deductible

John Rossheim |

Before You Take That Deduction, Consider These 4 Factors

Even though you now have an idea of what to deduct, you still need to jump through some hoops — four, actually — before plugging in those deductions:

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• You Must Be Looking for a Job in the Same Occupation: Career changers don’t get a break from the IRS. “If a general manager of a food market goes out and looks for a job as a VP of an Internet company, that’s not going to fly,” says Bradford Hall, managing director of Hall & Co. CPAs.

Distinctions between career fields can be arguable, so it pays to get professional advice. “I would go ahead and take the deduction if, say, you switch from journalism to marketing, because it’s all communications,” says Jim Dowling, senior tax manager for Weaver and Tidwell LLP.

• You Can’t Take a ‘Substantial Break’ Between Your Previous Job and Your Search: “There’s no specific time frame provided by the IRS,” Hall says. “But if a teacher becomes a stay-at-home mom, then years later decides she wants to go back, that’s too long” to qualify for job search deductions. “The IRS wants to encourage people to get back on the horse and get back in the labor force.”

• You Can’t Be Looking for Your First Job: High school and college students seeking their first real-world job cannot deduct search expenses — you must be transitioning between career positions.

• Job Search and Other Miscellaneous Deductions Must Exceed 2 Percent of Adjusted Gross Income: Major caveat: You can only deduct job search costs to the extent that they — lumped together with all other miscellaneous deductions (such as unreimbursed employee expenses) — exceed 2 percent of your adjusted gross income.

What if December 31 rolls around and you’re still looking? Relax — you can write off well-documented job search expenses for the year just ended, even if they haven’t yet paid off with a new job.

This article originally appeared on Monster Career Advice.

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