TAX TIP No. 30
Tired of your same old humdrum job? Then get out there and look for a new one! It might even help you cut your tax bill — under certain circumstances, job-hunting expenses are tax-deductible.
New job, same field
Second, you can’t decide to chill out for a while and then expect the Internal Revenue Service to help when you decide it’s time to get back on the career track. Deductions aren’t allowed for employment-search costs when there is a “substantial break” between your last job and when you begin looking for a new one.
Finally, recent graduates are out of luck. The costs you incur in getting your first job aren’t deductible, since the tax law only allows you to write off expenses incurred in searching for another position in your present occupation.
But if you’re a computer programmer and think you can get a better deal from another high-tech company, start saving those job-search receipts.
Even self-employment efforts could count at tax-filing time. The costs associated with investigating or attempting to start your own business, as long as it’s in the same field as your current profession, may be tax deductible.
But you can’t automatically subtract your job-hunting costs from your income — just those that, when added to all your miscellaneous deductions, come to more than 2 percent of your adjusted gross income.
So hang onto those job-hunt vouchers. They can help push that miscellaneous amount to the allowable level, even if you don’t get new work.
|— Updated: Feb. 11, 2008|