With the staggering amount of people laid off in 2008, the current concern for most is their search for a new job and making money in 2009. However, don't forget that with tax season upon us there are many things related to your job search that you can write-off! Now is the time to get refunded from last year's job search, or begin preparing for and documenting this year's job search. Here are a few tips from Sonja Felder, Owner of Savutax Consulting out of Los Angeles.
Most things related to your job search can be written off, including the costs of printing and distributing your resume, as well as resume-writing services. Don’t forget to include anything that you utilize as a part of your employment search. Felder explains, “…if a personal computer is used at home for the job search, the portion of your internet cost associated with looking for a job can also be deducted. The same goes for phone use.” While uniforms or special shoes needed as a requirement for a job may be tax deductible, Felder warns that interview attire, dry cleaning, or general work clothes (even if there is a dress code) is NOT.
Whether you’re looking for work in your own neighborhood, or in another state, don’t forget the opportunity to write off travel and mileage expenses, which can include plane tickets, rental cars, and hotels. All mileage going to and from interviews, career counseling sessions, and job-seeker resource centers is eligible for tax write-off at the rate of 24 cents per mile for 2009.
For the many out there who are taking on contract work and part-time jobs to keep themselves working until they find the right position, Felder offers this gem: “…if a person has a temporary or part-time job, the miles are tax deductible up to a year. Regular or permanent job miles cannot be deducted since it is considered commuter miles.”
If you can make it work, relocating to an area where more jobs are available within your expertise isn’t a bad idea. Even though in the current economy many companies are cutting back on their relocation packages, you can still write off any uncovered expenses on your taxes. Felder suggests, “In addition to the mileage deduction, an employee can also deduct temporary housing and storage costs. The deduction is reported on Form 3903 and flows to Form 1040. Some expenses could be deducted on either Form 3903 or Form 2106 which flows to the Schedule A. For example, food is not deductible on Form 3903 but can be deducted on Form 2106. However, you can only deduct the expense once.”
Going through a job search in a tough economy is difficult and draining, so get the help you need and write it off! "Career Counseling would fall under the search for new employment and would be eligible as a tax write-off." says Felder. Career Counselors can assist with a variety of job search related tasks such as career assessment, resume writing, personalized job search assistance, and more. Many free resources for career assistance can be found by logging on to http://www.servicelocator.org/ or you can locate a professional Career Counselor for specialized services through the National Career Development Association at http://www.ncda.org/ under “Consumer Info”. Also, don’t forget the valuable resources of your local libraries.
Mental health is also important to your overall well-being as well as your job search, and shouldn't be overlooked. If you feel the need to get some psychological counseling to stay balanced, this can be written off as a medical deduction for anything not covered by your medical insurance (if you’re lucky enough to have it!). You need to take care of yourself during stressful times to ensure that when you do get that big interview you can perform at your best!
Maintaining and storing records is of the utmost importance. Felder says that it’s very important to record the beginning and ending mileage on your vehicle every year. “The easiest way to determine miles on the car’s speedometer is to get the earliest car repair or oil change bill in the year and the latest car repair or oil change bill of the year. The bills will always have your actual miles and help to determine miles for the total year.”
You also may need to substantiate your expenses so Felder suggests keeping strict tabs on these. “Make sure appointments for job interviews are written down in an appointment book, Outlook or a PDA. You can then google or mapquest the miles and write them down in your appointment book or prepare a spreadsheet to keep up with your expenses.” Records should be kept for up to 10 years. Although a taxpayer has 3 years to amend a tax return, the IRS is allowed to go back 10 years to audit a taxpayer.
Sonja Felder can be contacted via http://www.savutaxconsulting.com/ for tax consulting purposes.