Tax Tips For Job Seekers
With the recession continuing to be an issue for job seekers, there are still millions who are out of work and the job hunt is hitting both college graduates and seasoned career employees. Did you know, though, that when you’re undertaking a job search there are some items you can “write off” on your taxes to receive some tax relief when you’re filing? There are many tax issues that job hunters are faced with so it’s always best to consult a tax professional before looking into any potential deductions.
Expenses for a job hunt may be able to be written off in the miscellaneous section of your tax form. Deductions you may be eligible to take for job hunting expenses could include business card, entertainment, travel, and resume preparation expenses. Writing off expenses for a job hunt can be for up to 2% of your adjusted gross income – this means that if you are a wage earner who earns $100,000 you can deduct up to $2,000 of your job hunting expenses.
Be advised that you can’t write off job hunting expenses unless you are seeking employment in the same field in which you were originally employed – this can cause an issue for recent college graduates or individuals for whom there is no employment in their current field.
For individuals who have been unemployed for some time and are looking to go solo, you will want to file for an EIN and set up a sole proprietorship and then report your income and expenses on a Schedule C. In this way, you can deduct home based office expenses (again, check with a tax preparer to make certain you are eligible for this deduction). You will also be able to write off your expenses for travel, resume preparation, business cards and other costs of working as a sole proprietor.
You must be in the actual pursuit of income or the IRS will disallow expenses – you need to show an income in three years out of five in order for the IRS to consider you a viable business entity. If you’re at all unsure as to what constitutes a write off, consult a tax professional.
Seeking tax relief from the IRS? Contact Guardian Tax Resolutions. The Guardian will help you resolve your tax issues and get you the piece of mind that you deserve.
