New York, NY -- It's time to start thinking about preparing your tax return. When you're job searching, it's important to keep track of your job search expenses, because many of these costs may be a tax deduction. If you've been looking for a job in the same line of work you're currently in, many of your expenses like phone calls, the costs of preparing and copying your resume, and career counseling are tax deductible.
You don't have to be out of work to have some of your costs qualify as a deductible expense. However, if you have been unemployed during the last year, you'll need to report your unemployment compensation as income. Also, severance pay, bonuses, 401K and/or other pension distributions may be taxable.
Work done as an independent contractor also must be included in your income. You can deduct certain expenses you have in looking for a new job in your present occupation, even if you do not get a new job. You may be able to deduct employment and outplacement agency fees, travel expenses related to your job search, and other expenses you accrue while looking for a job in your present occupation.
This article appeared in the February 4, 2008 issue of The Career News. It is reprinted here in full with permission from The Career News.