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Friday, August 26, 2016

Looking for Work May Impact Your Taxes

If you are looking for a job in the same line of work, you may be able to deduct some of your job search costs. Here are some key tax facts you should know about when searching for a new job:
  • Same Occupation.  Your expenses must be for a job search in your current line of work. You can’t deduct expenses for a job search in a new occupation.
  • Résumé Costs.  You can deduct the cost of preparing and mailing your résumé.
  • Travel Expenses.  If you travel to look for a new job, you may be able to deduct the cost of the trip. To deduct the cost of the travel to and from the area, the trip must be mainly to look for a new job. You may still be able to deduct some costs if looking for a job is not the main purpose of the trip.
  • Placement Agency. You can deduct some job placement agency fees you pay to look for a job.
  • First Job.  You can’t deduct job search expenses if you’re looking for a job for the first time.
  • Time Between Jobs.  You can’t deduct job search expenses if there was a long break between the end of your last job and the time you began looking for a new one.
  • Reimbursed Costs.  Reimbursed expenses are not deductible.
  • Schedule A.  You normally deduct your job search expenses on Schedule A, Itemized Deductions. Claim them as a miscellaneous deduction. You can deduct the total miscellaneous deductions that are more than two percent of your adjusted gross income.
  • Premium Tax Credit.  If you receive advance payments of the premium tax credit, it is important that you report changes in circumstances –  such as changes in your income, a change in eligibility for other coverage, or a change of address  –  to your Health Insurance Marketplace.  Advance payments are paid directly to your insurance company and lower the out-of-pocket cost for your health insurance premiums.  Reporting changes will help you get the proper type and amount of financial assistance so you can avoid getting too much or too little in advance.
For more on job hunting refer to Publication 529, Miscellaneous Deductions. You can get IRS tax forms and publications on IRS.gov/forms at any time.

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