If it's time to find another job, you know how much networking can help. Just make sure you don't overlook some outside assistance that could pay off when you start collecting a paycheck from your new employer: the tax code.
You can deduct many of your job-hunting expenses. That's not that surprising, since it's in the Internal Revenue Service's best interest to have you earning taxable income.
Uncle Sam's tax help, however, does have its limits.
Itemizing requiredYou must itemize deductions on Schedule A to count your job-hunting expenses.
That task is further limited by a threshold amount you must meet. Your job search costs are considered miscellaneous expenses. As such, they are deductible when they, and all other allowable expenses in this category, are more than 2 percent of your adjusted gross income.
That means, for example, if your adjusted gross income, or AGI, is $30,000, you must have miscellaneous expenses that add up to more than $600. So, if you have $650 in allowable expenses, you can deduct only $50.
The good news is that there are many miscellaneous expenses you can include on this section of Schedule A. In fact, some expenses you incurred at the job you are leaving but for which you weren't reimbursed can be added in to help get you over the 2 percent threshold hurdle.
Don't look too far afieldThe other big obstacle in writing off your job search costs is the type of work you're seeking.
You can deduct expenses only if you're looking for another job in the same occupation. If you're an engineer and want to go from Smith Construction to Jones Construction, the IRS will help pay costs incurred to make that office switch.
But if you want to leave Smith Construction and start a new career with Watson's Catering, don't expect any help from Uncle Sam.
The IRS also won't allow your deductions if you took a substantial break between your last job and your search for a new one. Basically, the IRS won't help subsidize your job hunt if, for example, you took a year off to travel or care for your kids.
And sorry, new graduates. You can't deduct job search expenses if you're knocking on doors trying to get your first full-time paying gig. Of course, if that first job is not the one of your dreams, start looking again within your profession, and this time take advantage of the tax breaks.
The one bit of good news among all these restrictions is that as long as you haven't taken a sizeable work break and are looking for employment within your current profession, you can write off eligible search costs even if you don't get a new job.