Tax Deduction of the Week: Job Hunting Expenses

The Roni Deutch Tax Center – Tax Help Blog published another great tax deduction of the week entry earlier this week. The new article explains deductions available for certain job hunting expenses. You can find a section of the post below, or check out the full text at RDTC.com.

Looking for a new job? In addition to the deduction available to taxpayers who have to move for a new job, you can also deduct qualifying expenses related to your search for employment.

2% Rule

If you are looking for a position in the same line of work that you are currently in, then many of your expenses can be deducted. You do not need to be out of work to have an expense qualify, but your deduction is limited by the 2% rule. Therefore, you can only deduct expenses that exceed 2% of your income.

IRS Restrictions

According to IRS Publication 529, you cannot deduct your job hunting 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.

10 Tips for Finding a Job in Today’s Economy

It seems like whenever you turn on the news, or look through a newspaper, there are stories about the ongoing unemployment problem in this country. In fact, just a few weeks ago it was reported that the number of Americans who are receiving food stamps rose to a record 40.8 million in May. To assist taxpayers across the country looking for employment, I have put together the following list of tips for finding a job in today’s economy.

1. Make Goals

One of the hardest parts of job hunting is the amount of perseverance it requires. In order to keep motivated, set goals to strive for on a daily, weekly, and monthly basis. For example, your daily goal might be to send out 5 resumes, or your weekly goal might be to go to at least one interview. By keeping yourself motivated you can stay focused, and encouraged to keep working towards your goal.

2. Get Aggressive

The job market is competitive right now, and if you want to stand out you have to work hard. Be aggressive in your job search by calling back potential employers and making sure they know you want the position. Then, always send thank you notes after every interview. Above all, stay positive, a good attitude will keep your mind sharp and impress potential employers.

3. Online Resources

The Internet can be used as one of the most powerful tools in your job search. Create profiles on online job search sites, and look for jobs in your area. You should also check the job section on classified sites such as CraigsList.org on a daily basis.

4. Resume Tips

Having a resume that is too general will give the impression to potential employers that you are not really that interested in the specific position they are offering. You should always modify your resume before sending it in for consideration, so that it is relevant to the open position. You do not want recruiters to think that you send the exact same resume to every listing you see. It also helps to write a new cover letter for each application.

5. Work on your Skills

There are some skills that need to be learned on the job, however while you are looking for employment you should consider building up some of your relevant skills. If you are unfamiliar with Microsoft Office then check out an online tutorial or pick up a book from Amazon.com. Any extra skills you can add to your resume will help set you aside from other job candidates.

6. Phone a Friend

According to the U.S. Bureau of Labor Statistics, 70% of jobs are found through networking. If you are serious about job hunting then you should call and email your friends and family members to see if anyone knows of a vacant position.

7. Use Social Media

Another great way to get the word out that you are looking for a new job is by participating in social media communities like FaceBook or LinkedIn. Just be sure that you do not post any questionable materials to your profile, as recruiters often Google the names of candidates, and you do not want your online presence to reflect an unprofessional image of yourself.

8. New strategies

Regularly checking the same job sites or the same newspaper could get you stuck in a rut. Therefore, you should try looking for job openings in new places whenever you have a chance. Maybe pick up a less popular newspaper or start a profile on a different job site.

9. Enlist Some Help

If you have been on the hunt for a while, you might want to enlist the help of a job placement agency. Run a search on Google for job placement help, and you should be able to find a few local agencies. However, you should always be cautious and avoid scams that make you pay excess fees for equipment, or invest in a pyramid scheme.

10. Nail the Interview

In the past you may have come to an interview expecting to answer a few questions, and leaving it at that. Not in this economy. Before you go in for an interview you should always research the company, and prepare a list of questions to ask the person conducting the interview. Preparation is the key, and if you look well prepared it will help you stand out from the list of applicants.

Tax Info For New Grads

Spring is here and many students are getting ready to graduate from college. Let me commend all you grads for your outstanding accomplishment. You have laid the foundation for a successful life ahead. As you get ready to land your first job, there are a few things you should know about filing your income taxes. Klipinger.com published a great article a couple years ago, but here’s the most relevant and up to date information:

First, you need to file your taxes. One of the first things to find out is whether your parents qualify to claim you as a dependent or if you can claim your own $3,650 exemption. To find out, answer these questions: Will you be under age 24 at the end of 2010? Were you a full time student for at least five months of the year? Did you live with your parents more than half the year without proving more than half your own support? If the answer is yes, your parents can still claim you as a dependent and that means they get the $3,650 exemption. If you are older or provided more than half your financial support, then the exemption is yours.

What do most college students have in common? Student loans. Once you start claiming your own exemption, you can also start deducting the interest you paid on your student loans. You can deduct up to $2,500 in student loan interest by filing the regular 1040 form. This deduction phases out if you earned more than $60,000 for single filers ($120,000 for joint filers) so talk to a tax professional to be sure you qualify.

If landing your new post-college job means a move you may be able to deduct those expenses. So long as the job makes you move more than 50 miles from your previous home and your new company does not reimburse you for the costs, you should be able to claim the deduction for the costs of a moving van, mileage, and any other normal moving expenses. You don’t have to itemize to claim this deduction, just make sure you keep receipts and records.

Tax Tips for Job Hunters

More and more people are losing their jobs in this country every day. As such there are thousands of normally employed Americans out looking for a new job. Luckily, there are numerous tax breaks and deductions available to help those in this particular position. To assist the readers of my blog that are actively looking for new employment, I have compiled the following list of tax tips for job hunters.

Keep Organized

While being out of a job and collecting unemployment can be disorienting, it is a good idea to remain vigilant with your organization and recordkeeping. You do not want to lose track of your financial documents and tax records. The costs of job hunting can be used to your advantage come tax season, so keep all receipts and documents related to your search for a new job.

Travel Costs

Travel expenses spent while traveling to an interview for a prospective employer can be written off. Although only 50% of your meal expense can be written off, airfare, hotels, and other, related travel expenses can be deducted in full.

Advertising Expenses

If you decide to post an ad for yourself on a job board, make sure you keep the receipt!

The IRS will allow you to deduct any costs of advertising your services if made while unemployed. This includes online ads, periodical and newspaper fees, and other ads.

Career Counseling

If you seek the advice of a career counselor while unemployed, those costs can also be deducted. Just be sure to keep all receipts, as well as a business card of the counselor you spoke with.

Legal Fees

If offered a position that requires an employment contract, then you might consider having a legal professional look it over. Not only are the legal fees tax deductible, the review may save you from getting into a contact that you do not understand.

Résumé Prep

Getting a job without even a minimal résumé these days can be tough. Fortunately, the costs to create, prepare, and send out your résumé are all eligible unemployment deductions. This includes stamps, envelopes, résumé programs, and mailing costs.

Employment Agency

Many unemployed taxpayers are choosing to get some help from an employment agent. If you do enlist the help of an employment agency to land the right job, you can probably write off any related fees.

Moving Costs Paid

If you need to re-locate for a new position, those costs may also be deductible. However, there are strict distance minimums and dozens of other qualifications. If you are going to deduct moving expenses then I highly recommend you check with a tax specialist before making any decisions.

Still See a Pro

Even though you are currently unemployed, and possibly a little strapped for cash, it is still advised you seek professional help on your taxes. In many cases, a tax preparer can point out helpful credit and deductions you may have missed. They can also make sure that you qualify for all the deductions you do claim. Finally, professional tax preparation services are also tax deductible.