All the jobs lost in the Great Recession might be back; however, there are always some people in the job market. It's healthy to have an unemployment rate of roughly 5% to 6%, as it represents a normal number of people seeking newemploymentopportunities.
Many people who currently have jobs spent time last yearlooking for one. If you were on the job market in 2014, there's a chance youqualify for a number of tax deductionsfor job seekers.
Continue Reading Below
IRS Pub 529 guidelines for job search deductionsThe Internal Revenue Service provides some basic guidelines when it comes to tax deductions for job seekers. You should look at these guidelines before you attempt to claim any deductions related to a job search:
- Tax deductions only apply to looking for a new job in your current profession. You cannot use the tax deductions to look for a job in a different profession. Further, first-time job seekers cannot use any of the deductions.
- If you get a job through a placement agency, you may deduct the associated fees. However, if you are reimbursed by your employer for the cost of a placement agency, you must report this as regular income.
- The IRS does not allow deductions after a "substantial break" between your last job and your current job. The IRS does not say specifically what constitutes a "substantial break."
- Only amounts over 2% of your adjusted gross income are deductible.
Six available job-search tax deductionsThere are a number of things you can begin adding up to reach the required 2% of your AGI. Income tax deductions are allowed for the following on youritemized deductionsworksheet:
- Resume and application costs.Whether it's printing out your rsum, sending it through the mail or buying special paper to print yourrsum on, all of these costs are deductible.
- Travel.You can deduct a number of costs associated with travel. However, the travel must be directly related to looking for a job. This includes the mileage you put on your car during your job search as well as taking a flight and booking a hotel to look for work in another city.
- Babysitting.Do you need someone to look after your kids while you're out job hunting? Your babysitting fees qualify as deductions, provided that you are legitimately hiring a babysitter to look after the little ones while you look for your next job.
- Moving.If your job search lands you a gig on the other side of the country, you're in luck: You can deduct all costs associated with your move, from packing tape to shipping. There are some stipulations, including that you must move more than 50 miles from where you currently live to qualify.
- Training and networking.Looking for a new job can often include job training and heading off to seminars to keep your skills fresh andyour foot in the networking pond. The cost of such events is deductible, provided that it is legitimately related to your job search.
- Phone calls.You can deduct the cost of phone calls made from a landline or a mobile account used onlyfor your job search. Therefore, you cannot deduct the cost of phone calls made from most mobile accounts, as minutes are bought in bulk.
When filing your 2014 taxes (or any other year), you should take all legally available deductions. Don't try and play "audit roulette," but don't be afraid to to take every deduction you're allowed.
This article originally appeared on gobankingrates.com.
The article 6 Ways to Deduct Your Job Search Expenses originally appeared on Fool.com.
Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.
Copyright 1995 - 2015 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.