Deducting Job Hunting Expenses

Do you know how much you've spent this year on job hunting? Did you know that you can get tax deductions from the job hunting process?

If you do, that's good. The less you earned last year, the more likely you are to be able to deduct some of your expenses; job-hunting costs are deductible past a certain percentage of your income. If you don't, you can save big bucks by going back over your 2007 calendar for jobhunt-related expenses. Then, going forward, you can write them down as they happen.

This means mileage, parking and/or bus fare for getting to interviews, including informational ones. It means fees for professional conferences and meetings you attended for networking purposes, phone bills, subscriptions to professional journals and newspapers that you took out to read the want ads and job columns, resume and interview counseling, fees, courses you took to keep you current in your field, the video you made to send to headhunters, and meals and drinks you bought for someone who knows someone at Google who may have a friend who's hiring. It includes what you paid those charlatans who promised to give you access to hidden job markets. Depending on your circumstances, it may include computer equipment and online services, plus paper and printer cartridges. It may or may not cover the ticket you got for parking in a bus stop in front of the office supply store.

How do you know what's deductible? That's what accountants are for. If you don't have one, please find one right away. You may think it's a luxury at a time where your job situation is iffy, but take it from someone with experience that accountants can save you more than their fees (some of which may be deductible) by advising you-perhaps-that you can deduct the greens fees for the national widget engineers' golf tournament, and your airfare and hotel room, but not the new set of clubs.

You say you have tax software? Tax software is great for calculations, and the software maker may send someone to accompany you to the audit, but you don't want to get that far. The big thing an accountant can give you that software can't is permission. Software can't tell you that maybe you can expense the Cajun cooking course you're taking because it helps you hone your skills as a chemist.

Before you can deduct anything, though, you need a good record keeping system. This goes beyond keeping receipts, which it's a good idea to stow in a file called something like "Job receipts 2007." Write everything down that has the slightest relationship to your job search. For me, the best way to do this is on a calendar or organizer, either electronic or paper. This will not only help you at tax time, but can be invaluable when you get a call from "Dave at International" and you don't know whether he's from International Snowboards where you interviewed last Thursday or International Unicycles where you left a message on Monday. If you've written "IS, Int. Joe Jones, Ann Brown, 24 mi., tolls $1, pkg. $12" for last Thursday and "IU, msg. Dave Smith" for Monday, there's your answer. If the calendar or organizer is electronic, you can search for all instances of "IU" or "Int." If you opt for a PDA instead of the fine free calendar software that's available everywhere, your accountant may even let you deduct some of the cost. I wouldn't count on it, but you can ask.

Even if you're making so much money that you can't use the deduction-which would be great-you won't be wasting your time. It's good to keep track of every contact you made-organization, person, email, telephone, whether you wrote or called or emailed, when you made the contact, and where the contact came from-newspaper ad, job board, friend, corporate Web site, etc. If the company is less well known than Google, you may want to write down what it does. How can you be expected to remember whether International Enterprises is into travel, public relations, or electronics manufacturing? You can use your calendar for this if it's expandable enough, especially if it includes an address book. I've found that it's easy and helpful to keep a spreadsheet with the contact info. If you don't have spreadsheet software, ask your accountant about expensing it. Once in a while a company that writes you a rejection letter, saying that it will keep your resume on file for six months, actually does that and calls you later. It's great to be able to recall what you knew about it.

Keep your records even after you find the perfect job and file your tax return. First, they can be an invaluable source of professional contacts. Second, heaven forfend, you may need them in future searches. Third, if you do face a tax audit, the auditors will be so impressed by your methodical recordkeeping that they'll conclude you're the most honest person alive.

Article by Homesteader

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