Hunting and Pecking ... and Packing Deductions Or .... The Job Hunting Safari

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Hunting and Pecking ...
and
Packing Deductions
Or ....
The Job Hunting Safari

By Eva Rosenberg, MBA, EA

Next to death, divorce ... and OK, taxes, having to look for a job is the most stressful thing you ever face. Especially now, when the economy seems so uncertain. Companies you could count on to have openings, no longer do. So the job search is taking longer and the final results may not offer the kind of compensation you expected at the outset.

To make it all worse, since you don't know when you will be back at work, this is kind of a limbo time. People rarely use it productively, to take some leisure time to re-energize after a tough few years on the last job, or to start a cherished, but long-deferred project. Looking back, if you had known you had that much time coming, you'd have done it all so differently.

Let's talk about just two of those things you must do differently right now. Record-keeping and taxes.

* Depression, Displacement, Denial

Most people who are out of work get so lost in their misery, that despite having more free time than ever, they just don't seem to be able to get their tax data together - and they generally don't file tax returns for that year - and then the problem compounds the next year - until it takes over your life and your credit for years, once you try to recover .

So, get on with it - NOW!

Enough about that.

Let's talk about what you can deduct during your job hunting safari. Aw heck, first let's talk about what you can't deduct and get that out of the way.

The three kinds of expenses you CANNOT deduct are:

1) Costs to land a job in a new career or profession.
2) Job hunting costs if "there was a substantial break between the ending of your last job and your looking for a new one."
3) This is your first time looking for a job. (e.g. your first job)

That's clear. So, what costs CAN you deduct?

Advisors:

Career counselors
Resume Preparation
Business Coaches
Therapists - if they are helping you with your job search, unemployment-related depression, interview/people skills. (This is a gray area, but if presented skillfully, it could fly as a job-related expense.)

Mileage:

Driving to/from interviews
To/from all those advisors above
To/from job fairs, trade shows, conventions, any networking, personal marketing event or location.
To/from getting business supplies, tools, materials
Where else did you go that can honestly be interpreted as job hunting?

Parking;

Meters
Valet
Lots
Tips

Other costs:

Tolls
Subways
Trains
Bus fares
Cabs
Rental cars - to make the right impression at an interview or venue, to drive to out of the area sessions/interviews, or while your car is in the shop.

Supplies:

Paper, especially the good kind, for resumes, envelopes. (Hint: Don't get anything with strong colors or patterns that don't copy well. Resumes get copied and passed around)
Printer/typewriter supplies: toner, cartridges, ribbons, film, etc. (Don't estimate. Use the real costs. They're higher than you think.)

Other supplies:

Disks
Tapes
CDS
Other back-up media
Files
Organizers, appointment books
Calculators
Cabinets
Labels ... keep thinking ...

Printing:

Business cards
Resumes
Promotional tools

Equipment:

Be really careful here - don't expect to write off your computer, printer, etc. for job hunting. Looking for a job is meant to be a short-term function - and those are designed to be depreciated over 5 years. (Long-term, well, that's marketing, isn't it?)

Dues:

Yes - Business and professional organization, chambers of commerce, leads groups ...

No - country clubs, social organizations, fraternal organizations

However, the costs for using those facilities, meals, etc, while you are there on business are deductible.

Travel:

Ah! A really popularly abused expense.

Only use this expense if the main purpose of your trip was for job interviews. Be prepared to show a list of the companies in that town with whom you met, dates/times. It would help if you had letters either setting up the interview or following up, after the fact (preferably from them?).

You can also write off travel to continuing education, to enhance your skills and to network with peers who can hire or recommend you.

Meals and Entertainment:

Another seriously abused expense.

But, let's face it, the really good jobs, the ones in the 6+ figures, generally come about because of WHO you know, not what you know. (Lots of people know as much as you do ... But which one of you lands the plum job?)

Clearly, the best jobs come about due to schmoozing. Sometimes, it's a matter of hanging out at the right restaurants and being there to catch the eye of the key executive you want to meet. Sometimes, it's a matter of taking the right person to lunch, dinner, a sporting event or play.

So, don't overlook these costs just because they've been abused. But do use them, so that they make sense.

Creative Costs:

I can't even begin to tell you what kinds of things might appear here.

Really, that's all up to your imagination. What have you done/can you do to attract the attention of the right person in the right company? The right employment or talent agent? The right agency? The right manager?

Does it involve sending them balloons or clever cards or witty promotional material to pique their curiosity and make you stand out? That's deductible.

Does it involve creating an elaborate plan for their company's/department's improved production or profits? Then use all the costs for research and materials that you incur.

The Keys to Keeping Deductions

The key to writing off these costs ... and any costs, really, is documentation. If you WRITE down who, what, when, where and WHY this is a business deduction, you won't lose it in audit.

Remember, IRS knows that not all of your interviews will result in a job. And that in this economy it may take more creativity and cleverness to get a good job. So, they count on you to tell them why your expenses really are job expenses.

Do it right, and you'll save yourself a fortune on your taxes.

And let's face it, while you're out of work, you'll need the money.

===========
© Eva Rosenberg, March 27, 2002

Bio

Eva Rosenberg, your TaxMama, has taken the most dreaded topic, taxes, and turned it into fun. Aside from saving people amazing sums of money on their taxes, she has also created a brand recognition unique in the tax industry. Can you think of another tax company that gives you a warm, fuzzy feeling? Imagine what she can do for your or your business.

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