Deducting the Cost of Finding a New Job

It has been said that looking for a new job is a full-time job, in and of itself. For anyone who has found themselves in that position, the process of finding employment can be stressful enough. If you are one of the more than 14 million people who were unemployed in 2009 the time and energy you spent looking for that new job may provide some much needed tax breaks on this year’s tax return.

Documentation of Job Search Expenses

One of the best ways to find what tax breaks may apply is to go through the documentation you accumulated while focusing on your job search, whether it resulted in a new position or not. This refers to people looking for a change within their current profession. Job search expenses may be deductible when, totaled with employee expenses and other miscellaneous deductions; they exceed two percent of adjusted gross income. Such expenses may include: employment and out-placement agency fees, costs of resume printing, costs of mailing resumes, legal fees related to doing and keeping a job, mileage and some travel expenses to and from job interviews and more. These are reported on Schedule A, Itemized Deductions, which is filed with Form 1040.

Child Care For Job Interviews

Those who pay for child and dependent care in order to go on job interviews may claim up to 35 percent of these expenses as a credit against their taxes. This is accomplished by filing Form 2441, Child and Dependent Care Expenses with the tax return. This non-refundable tax credit is based on the smaller amounts paid for child and dependent care or the earned income of the taxpayer claiming it. For a married couple filing jointly, both spouses must have earned income or one of them might qualify as a full-time student or be disabled and incapable of self-care.

Relocating For A New Job

If you moved at least 50 miles during 2009 in order to start work at a new work location, you may be able to deduct some moving expenses. If you meet certain tests relating to all three of the following requirements, your moving expenses may be deductible on your federal tax return:

1. Your move is closely related to the start of work at a new job location
2. You meet the distance test
3. You meet the time test

If your employer reimburses you for the cost of the move, the reimbursement may have to be included on your tax return. Your moving mileage is deductible at 24 cents per mile. Deductible moving expenses include the cost of moving furniture and household items as well as your lodging en route. In addition, always be sure to notify the IRS of your relocation, by sending a Form 8822, Change of Address, to the IRS Service Center where you filed your last return.

For more details on the qualifications for deducting moving expenses or reporting reimbursement, consulting with a skilled tax preparer is always an advisable strategy.