By Nat Sillin Whether a new job opportunity is across the country or across town, it’s important to track the cost and strategy of a job search as closely as you track your career objectives. Job seekers may qualify for tax deductions depending on their current employment status. For example, if you are currently employed and looking for a job in your existing field, you may qualify for a range of deductions for job-hunting expenses. However, if you are a first-time job seeker or someone who has been out of work for a significant time period, you may not qualify for similar deductions. Consider discussing a future job search with a qualified advisor who can focus on your specific circumstances. The conversation shouldn’t be limited to tax issues alone. It is just as important to talk about pay, retirement savings, and benefits issues as you move out of one job and into a new one. Successful job searches take planning, and a good first step is raising your professional profile in person and online. A recent Jobvite study notes the current popularity of leading social media options in reaching employers, and if you have a specific employer in mind, they may have online options that allow you to receive their latest job openings via email or text. For more general research on occupations and industries, the U.S. Bureau of Labor Statistics’ (BLS) Occupational Outlook Handbook is a wide-ranging and updated online resource detailing 10-year pay and hiring forecasts. Whether you’re a first-time job seeker or a mid-career professional, the BLS site provides basic information that can guide your search into a specific field, company or city. Check your credit reports. Remember that many employers screen applicants’ credit reports as part of their candidate review. Go to AnnualCreditReport.com for free access to reports from the three major credit agencies – Experian, TransUnion and Equifax – to check for potential errors or credit negatives you need to repair. Monitor your expenses and check for deductions. Online job search and application sites have cut the cost of job-hunting substantially – people rarely snail-mail resumes and cover letters anymore – but job-hunting expenses still exist and should be tracked for potential tax savings if you itemize. Here are a few listed by the IRS, and note they apply very specifically to your employment status and field:
- Expenses may qualify as deductions only for a job search in your current line of work. You won’t be able to deduct expenses for a job search in a new occupation.
- You can’t deduct job search expenses if you’re looking for a job for the first time or if there’s been what the IRS calls a “long break” between your last job and beginning your search for a new one.
- If you travel to look for a job in a qualified job search, you may be able to deduct the costs of all or part of the trip.
Friday July 17, 2015/