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June 11th, 2001, 05:02 PM
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A Tax Break for Pavement Pounders
June 11, 2001
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· A Tax Break for Pavement Pounders
QUESTION: Can I take any tax deductions for travel during job searches, interviews, etc.?
— Glen Bossie
ANSWER: Hope you aren't trying to find yourself. As it turns out, the tax man will indeed let you deduct expenses related to a new job search — so long as you're staying on the same career track. That means that if you're quitting your job as a high-powered lawyer to pursue a career in acting, you won't be able to deduct the money you spent on airfare to your auditions in Los Angeles. And unfortunately for recent graduates, the Internal Revenue Service doesn't allow deductions of expenses related to finding a first job.
But everybody else can claim anything related to a job search as a miscellaneous deduction on Schedule A of Form 1040. That means travel expenses such as airfare, meals, cabs, car mileage (34.5 cents a mile for 2001) and tolls, so long as the travel is primarily for job-search purposes. If any part of your trip is personal, you'll have to separate your job-search expenses from your personal ones, says Ron Hegt, a certified public accountant and partner at Hays and Co. in New York. For example, you can deduct cab fare to and from your interview but not the airfare if you're squeezing the job-hunting into a vacation. Besides travel expenses, you can also deduct employment-agency fees and even costs like printing, paper and postage.
The catch? In order to receive any deduction, your total job-search expenses have to exceed a 2% floor of your adjusted gross income, or AGI, says Art Ford, a CPA at Sullivan Bille in Tewksbury, Mass. For example, if your AGI is $50,000, you'll need to hit $1,000 (2% of $50,000) in order to get a dollar in deductions.
Fortunately, you can also bundle job-search costs with other miscellaneous expenses like professional and business association dues, investment expenses, and tax advice and preparation fees for purposes of reaching the 2% floor. You can read more about miscellaneous deductions in IRS publication 529 and our previous Ask SmartMoney on the same topic.
Ask SmartMoney Archive
A Tax Break for Pavement Pounders
June 11, 2001
Got a Question?
· A Tax Break for Pavement Pounders
QUESTION: Can I take any tax deductions for travel during job searches, interviews, etc.?
— Glen Bossie
ANSWER: Hope you aren't trying to find yourself. As it turns out, the tax man will indeed let you deduct expenses related to a new job search — so long as you're staying on the same career track. That means that if you're quitting your job as a high-powered lawyer to pursue a career in acting, you won't be able to deduct the money you spent on airfare to your auditions in Los Angeles. And unfortunately for recent graduates, the Internal Revenue Service doesn't allow deductions of expenses related to finding a first job.
But everybody else can claim anything related to a job search as a miscellaneous deduction on Schedule A of Form 1040. That means travel expenses such as airfare, meals, cabs, car mileage (34.5 cents a mile for 2001) and tolls, so long as the travel is primarily for job-search purposes. If any part of your trip is personal, you'll have to separate your job-search expenses from your personal ones, says Ron Hegt, a certified public accountant and partner at Hays and Co. in New York. For example, you can deduct cab fare to and from your interview but not the airfare if you're squeezing the job-hunting into a vacation. Besides travel expenses, you can also deduct employment-agency fees and even costs like printing, paper and postage.
The catch? In order to receive any deduction, your total job-search expenses have to exceed a 2% floor of your adjusted gross income, or AGI, says Art Ford, a CPA at Sullivan Bille in Tewksbury, Mass. For example, if your AGI is $50,000, you'll need to hit $1,000 (2% of $50,000) in order to get a dollar in deductions.
Fortunately, you can also bundle job-search costs with other miscellaneous expenses like professional and business association dues, investment expenses, and tax advice and preparation fees for purposes of reaching the 2% floor. You can read more about miscellaneous deductions in IRS publication 529 and our previous Ask SmartMoney on the same topic.
Ask SmartMoney Archive