The IRS is On Your Side!

Okay, maybe that’s overstating it a little bit, but the IRS does want you to have a good job so they can tax
you into oblivion. To that end, the IRS gives you more than encouragement, they give you tax deductions!

Of course, they wouldn’t be the IRS if they didn’t turn even that into a labyrinthine puzzle. So here’s the
skinny:

•       Only the job search expenses over 2% of your adjusted gross income can be claimed. Of course, the
AGI is reduced by expenses, so once you figure out what your AGI is without the job search expenses, you
have to calculate 2%, add in the job search expense, recalculate the AGI and the 2%, do it again… thank
goodness for computers…

•       The job you’re searching for has to be in-line with your “present occupation.” Presumably, the IRS
doesn’t want you to take a cut in salary that switching career paths might incur. So if you’re a police officer
who wants to become an accountant, sorry.

•       Walking in the “vague” column is the sticky phrase “a substantial break” which the IRS doesn’t bother
to define; but if you’ve had a substantial break, whatever that is, you’re out of luck. That means you
should show evidence of job searching immediately upon unemployment (success isn’t required,
just searching…)

•       In a stroke of bureaucratic dysfunctionalism, the IRS has decreed that you can’t write off expenses
for your very first job hunt. If you’ve never had a job before, and therefore never filled out a tax form
before, you can’t claim your write-offs. They want to keep as much of that first one as possible…

•       Write offs are for job searches not job placements. You don’t have to accept job offers in order to
deduct the expenses in pursuing them.

•       THE BEST NEWS, however, is that expense pertaining to outplacement agencies, resume writers,
career coaches and printing & mailing services (like Career Services International) are deductible.

Check with your accountant or tax filing software for more information. You can also download IRS Publi-
cation 17 for details.