March 16, 2016
It’s that time of year again when we’re all looking for tax deductions and that means, we’re getting calls from independent consultants and contractors as well as candidates interviewing for FTE positions who want to know if they can write-off their job hunting efforts. Let me start by saying that before you take any action, you should first consult with a trusted tax adviser.
For those of you who are independent contractors or consultants looking for your next gig, you’re probably already familiar with the custom and ordinary tax deductions that come with being self-employed, i.e. health insurance, office space, office supplies, mileage, lodging, etc. But don’t forget the little things that are worth counting including the membership dues of trade organizations and consultations about your freelance work with lawyers, accountants and other professionals.
If you are a candidate looking for your next FTE position, pounding the pavement during your job search may help you cut your tax bill. However, there are certain circumstances and requirements you must meet to be eligible for tax deductions.
The first and foremost rule is that you have to be looking for your new job in the same field. In other words, if you are currently or were formerly employed as a software engineer, your job hunt must be for a new position within software engineering.
Second rule is that your job hunt must be continuous after leaving your position. You can’t take a long, substantial break between leaving your last company and the start of your new job search.
Third rule is that if you are a recent grad, you’re out of luck for a tax deduction. Sorry about that. If you have read this blog to this point and find yourself still eligible for a tax deduction, hang on to your job search receipts because here’s what you can write-off:
Resume writing and printing services
Employment and any outplacement agency fees you incurred
Telephone calls and travel expenses which include out- of-town job hunting trips
Snail mail costs (stamps, envelopes, etc.)
Also, be aware that if you’re attempting to establish your own business and freelance, as long as it’s in the same field as your current or former profession, your efforts may be tax deductible.
Please note: The information of what is deductible in this blog is from US government resources. We presume the governmental information is correct, although we recommend you contact the Internal Revenue Service or a reputable tax accountant to double check the list of write-offs. With tax codes always changing, it’s best to CYA!