July 29, 2010

Little-known Tax Deductible Expense

Most people are familiar with the usual expenses you can get tax breaks for. For business owners, you get tax relief for business-related expenses. If you are an employee, you would probably enjoy tax deductibles like donations to charities, child relief and so on. But there is one tax break that is not very often spoken about – job search expense deductions. Especially in this shaky economy, this tax break would apply to many taxpayers and come in handy, too. If you have spent any time or effort in looking for a job this summer, you should tally up your expenses because you may be able to deduct some of these job search expenses on your next tax return.
But there are a few conditions that govern which job search related expenses are eligible for the tax break. Here are a few things you should know about deducting costs related to your job search.

Firstly, your expenses must be spent on a job search in your current occupation. You are not permitted to deduct expenses incurred while looking for a job in a new occupation. Therefore, all your expenses like employment and outplacement agency fees you pay while looking for a job in your present occupation are deductible. However, when you find employment and your new employer reimburses you in a later year for the employment agency fees, you must declare the amount you receive as an income up to the amount of your tax benefit in the earlier year.

You can deduct amounts you spend for preparing and mailing copies of your résumé to prospective employers as long as you are looking for a new job in your present occupation. You may also be able to deduct any travel expenses you incur (to and from your area) if you travel to another area to look for a new job in your present occupation. But this only applies if the trip is primarily to look for a new job. Whether the trip is primarily personal or is primarily for job-hunting depends on the amount of time you spend on personal activity compared to the amount of time you spend looking for work.

Secondly, these deductions only apply to current employees looking for a new job. It does not apply to job seekers entering the employment market for the first time.
Finally, you cannot deduct job search expenses if there was a substantial break between the end of your last job and the time you begin looking for a new one. Seek the advice of an IRS attorney for more details. Visit http://www.getirshelp.com or call us at (813) 229-7100 for a free consultation.

Darrin T. Mish is a veteran, nationally recognized tax attorney who has focused on providing IRS help to taxpayers for over a decade. He regularly travels the country training other attorneys, CPAs and enrolled agents on how to handle their toughest cases with the IRS. He is highly ranked among the top attorneys in the country, with an AV rating from Martindale-Hubbell and a perfect 10 on Avvo.com. Martindale-Hubbell has also honored him with a listing in their Bar Register of Preeminent Lawyers. He is a member of the American Society of IRS Problem Solvers and the Tax Freedom Institute. With clients on every continent but Antarctica, he has what it takes to solve your IRS problems no matter where you live in the world. If you would like more information about his practice and how he can help you, please call his office at (813) 229-7100 or toll free at 1-888-GET-MISH.