Tax Advice For Job Hunters

Hey, we’re not accountants or tax professionals, so none of this should be taken as gospel, and if you get audited, don’t blame us.

Job search expenses are tax-deductible and could save you bundles of cash as April 15 draws ever nearer.

You itemize these expenses on Schedule A (the same form you use to itemize home mortgage interest, charitable donations, and medical expenses), under “Unreimbursed Employee Expenses.” You can only deduct the expenses that exceed 2 percent of your Adjusted Gross Income (AGI), but if your income was a little lower last year, or even if it wasn’t, you could save a bunch.

Pongo Resume covers some of the deductions:

* Resume preparation and distribution costs
* Fees for outplacement services
* Fees paid to employment service agencies
* Telephone expenses
* Travel expenses, including lodging, for job interviews.

Example: If your AGI is $50,000, you can deduct everything above $1,000 (2 percent of 50,000=1,000); if you have $1,500 in job search expenses, you can claim a $500 deduction. If you’re filing singly, that deduction saves you a hundred bucks and change.

Note 1: You can’t take these deductions if you’re switching fields, took time off after the end of your last job, or are entering the job market for the first time. Sigh.

Note 2: Unless your Schedule A expenses exceed the standard deduction allowable by the IRS ($5,700 for a single taxpayer in 2009), none of this accounting wonkosity will help you much. So if you don’t pay mortgage interest (which is usually the sole deciding factor in whether you exceed your standard deduction), you might not even want to bother gathering your receipts; you’ve got better things to do.

But that’s just our opinion. Check with a tax preparer (Howard Samuels works with mediabistro members and offers discounts to AvantGuild members–he specializes in freelancers but even non-freelancers can give him a call) and get some real binding advice if you’re hoping to go this route this tax year.