Smart Ways to Manage Job Search Expenses
A job search can be expensive as well as time consuming. There are ways to manage your expenses so that you get the maximum value out of your spending. These are strategies for keeping costs down and taking advantage of all the tax deductions you are entitled to.
Losing a job has become a bit like getting COVID, and job hunting could become a new national pastime, with millions of individuals ready to shop around for better opportunities as the national economy continues to improve. Also, the IRS allows you to deduct expenses such as job search costs and moving expenses related to taking on a new job.
Reducing Job Search Expenses
1. Network over coffee. Face to face networking still matters even in a TikTok age. Inviting people out for coffee or breakfast is usually less expensive than lunch or dinner.
2. Choose your wardrobe carefully. Buy your interview suits and tasteful accessories at consignment shops or on Amazon for a fraction of the retail cost. Select separates that you can mix and match for more options.
3. Barter for services. Some job coaches are worth their high fees, but you may know people who will help each other out for free. Offer to proofread each other's resumes. Share job leads and take turns rehearsing for interviews.
4. Access community resources. Local government offices, nonprofits and business groups often provide free and low-cost career services. Call your state employment office and check community calendars.
5. Evaluate your travel priorities. In a tight job market, some employers may expect you to pay the travel expenses for long distance interviews. Ask yourself if the position is worth it for you. Clarify how many candidates are being considered.
Deducting Job Search Expenses
1. Stay in the same field. The IRS only allows deductions for job search expenses if you're looking for a job in your current occupation. On top of that, there cannot be any significant gap between your last position and the start of your job search.
2. Know the limit of 2 percent. Allowable job search expenses are deductible if you itemize deductions on Schedule A and those miscellaneous expenses including your job search costs exceed 2 percent of your adjusted gross income.
3. Hold onto your receipts. Good record keeping will help you stay on track. Keep receipts for everything from stamps to airline tickets. The IRS may want to see more than your credit card statement. Mileage logs and odometer readings can be submitted if you travel by car.
4. Watch your phone minutes. Phone bills only count if you incur extra charges. If you have an unlimited phone plan, the details are probably irrelevant to the IRS. 5. Calculate agency fees. If a job search agency charges you a fee, you may be able to deduct it. If your new employer later covers it, you'll naturally need to make a reimbursement.
6. Keep business trips mostly business. To be deductible, a job search trip must be primarily for business purposes. Keep a log of your time to confirm your activities.
7. Specify your coaching services. Certain coaching services can be deducted while others fall outside the guidelines. Improving your interviewing technique is likely to be approved while counseling on making a career switch would be ruled out.
8. Consider your child care needs. Some experts question if child care can be deducted. If you want to do so, document it like any other expense with receipts and details on why it was essential.
9. Stay up to date. The tax code is complicated and changes all the time. Consult your tax professional or IRS Publication 529 on Miscellaneous Deductions to ensure your information is current.
Keep expenses under control so you can focus your efforts on finding the right position for you. Your job satisfaction is worth making an investment, but a little knowledge and careful record keeping can help you get excellent results for less.
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pro tips, and comment below you job search expenses or ways you cut that cost.