It’s Your Money Column – Employment Seeking Tax Deductions

If you were looking for a new job in 2001, you may have deductions that you can take when you file your tax return this year. If you didn’t start looking for work until 2002, keep good records and you’ll save money on your taxes next year.

You can claim job-hunting expenses if you are looking for a job in your profession. Expenses include employment agency fees, resume preparation costs, job counseling fees, the cost of publications to check job ads and similar items.

If you travel to look for or interview for a job in another location, travel expenses are deductible. The primary purpose of your travel must be to look for a job. You can deduct the cost of an airline ticket, auto travel, parking fees, tolls, taxis, lodging and meals. For 2001 taxes, you can deduct 34½ cents per mile for automobile travel.

Lodging expenses are the actual amount spent and supported by receipts. For meals, you can deduct the actual cost of meals or you can use the standard per diem meal allowance. For 2001, the standard per diem meal allowance is $30 per day. However, there are many higher-cost areas where a higher per diem is allowed.

Even if you use the standard deduction on your taxes, you may be able to deduct moving expenses if your new job is at least 50 miles away and if you work full-time for at least 39 weeks during the first 12 months at your new location. A tax quirk says that you must file the moving expense in the year that you moved and alter your next year’s taxes if you don’t meet the 39-week requirement. This requirement is waived if you are involuntarily discharged from your job. You can deduct travel expenses including lodging (but not meals), the cost of moving household goods and actual auto expenses or 10 cents per mile.

No matter how legitimate your deduction claims are, you must be able to support these expenses if you are audited. Keep track of your expenses as they occur. Get a small notebook that will be easy to locate and use. Make a table with headings across the top – Date; Destination/Job Search Event; Round-Trip Mileage; Type of Expense; Total Expense. Keep up with the records and taxes will be a snap.