Saturday, January 16, 2021

4 Job hunting tax break tips

Taxpayers who spent time looking for a job in their current profession may be eligible for certain tax breaks, even if they don’t land a new job, reminds Liberty Tax Service. Taxpayers will need to itemize these miscellaneous deductions on Schedule A, which is filed with Form 1040, and their costs must total more than 2 percent of their adjusted gross income (AGI).

Here are 4 job-hunting tax deductions:

 Job search fees. The fees a taxpayer pays to an employment or outplacement agency are deductible unless an employer pays them directly to an employment agency or they are repaid to you. Paid online services, such as a LinkedIn premium account, that can help in a job search may also be deductible.

Resumes. Taxpayers who search the old-fashioned way can deduct expenses for preparing and mailing resumes and query letters.

Travel expenses. Typically, travel expenses to and from the job interviews are deductible. Taxpayers can claim the standard mileage rate of 54 cents for the round-trip mileage. Taxpayers may also deduct travel expenses, such as airfare or train tickets, if their trip was primarily to look for a new job. It’s important to document the time spent looking for a job and the amount of time spent on vacation or other pursuits in these cases.

Moving expenses. If a job search is successful and the taxpayer lands a job in his or her current profession, the taxpayer may also be able to claim moving expenses. Taxpayers should complete Form 3903 Moving Expenses, and attach it to Form 1040.  Allowable moving expenses include transportation, cost of storage, travel, and lodging expenses.  However, the cost of meals cannot be claimed. Also, the move must be over 50 miles, and the taxpayer must reside in the area 39 weeks of the last year.

Some expenses are not allowed as job-hunting expenses. If a taxpayer just graduated from college and is seeking a first “real job,” the expenses cannot be deducted. Additionally, taxpayers cannot deduct the expenses of looking for a job in another field or if the taxpayer has taken too long to start their job search.
To find a local Liberty Tax office, call 866-871-1040 or visit www.libertytax.com.

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