Good news! Your job search expenses may be tax deductible. It is time to find out whether the money you spend on federal career consulting, federal resume writing, travel and expenses supporting the job search, USAJOBS uploads, Ten Steps to a Federal job books and training are in fact tax deductible.
Here are the top six things the IRS wants you to know about deducting costs related to your job search, and my comments about them.
1. IRS: “You can deduct certain expenses you have in looking for a new job in your present occupation, even if you do not get a new job. You cannot deduct these expenses if: …You are looking for a job in a new occupation.” (IRS Publication 529, Job Search Expenses)
My comment: The federal government is NOT a new occupation, it is a new employer. If you are looking for a federal job related to your previous position, you may be able to deduct your expenses. The key is whether you are looking for positions requiring some of the same transferable skills from your past position to your new position. For instance, management/leadership skills are the same from private industry to federal government … accounting skills are the same … research and analysis skills are the same … customer services is the same.
2. IRS: “You can deduct employment and outplacement agency fees you pay in looking for a new job in your present occupation.”
My comment: The Resume Place, Inc. is considered an “employment and outplacement agency,” so any fees you incur enlisting our help with your federal job search would meet this criteria. Qualifying fees include our federal resume services, federal career consulting services, federal career training, and books.
3. IRS: “You can deduct amounts you spend for preparing and mailing copies of a resume to prospective employers if you are looking for a new job in your present occupation.”
My comment: Remember to save your receipts for portfolios, envelopes, stamps, faxing, rented computer time, or any other expenses related to writing and sending your resume.
4. IRS: “If you travel to an area and, while there, you look for a new job in your present occupation, you may be able to deduct travel expenses to and from the area. You can deduct the travel expenses if the trip is primarily to look for a new job. The amount of time you spend on personal activity compared to the amount of time you spend in looking for work is important in determining whether the trip is primarily personal or is primarily to look for a new job.”
My comment: If you drive to The Resume Place, Inc. or attend our Ten Steps One Day class in Gaithersburg, MD, the expenses to get there and back are considered tax deductible.
5. IRS: “You cannot deduct job search expenses if there was a substantial break between the end of your last job and the time you begin looking for a new one.”
My comment: The IRS did not define how long a “substantial break” is, but even if you have been out of work for awhile, you may still be able to deduct the expenses. Please check with your accountant.
6. IRS: “You cannot deduct job search expenses if you are looking for a job for the first time.”
For more information about job search expenses, see:
IRS Publication 529, Miscellaneous Deductions » This publication is available on the IRS Web site, IRS.gov or by calling 800-TAX-FORM (800-829-3676).