Job Hunting expences

Generally, you should ask yourself two questions about any expenditure: 1. Am I spending this money because of this activity (the job hunt)? 2. Would I spend this money if I were not engaged in this activity. If you answer the first question "Yes" and the second "No," you probably have a deduction. A caution, however; you must be considering a specific expenditure and there must be some direct connection to the activity. Using these tests, your newspaper subscription is probably OK, the DSL is probably not. Credit card statements are not acceptable documentation for most deduction. The problem is that the entries only say where you spend the money and how much; they do not give any information of what you got in exchange so there is no way to determine the business purpose. Lanny K. Williams, CPA Nawarat, Williams & Co., Ltd. Income Tax Services for Expatriate Americans

Basically, you are allowed expenses for employment agencies, resume copying, travel, and transportation expenses. For travel (=out of town), you can include airfare, lodging, local transportation, meals and incidental expenses, if the travel was primarily to look for a job. For transportation (=in town) you can use mileage, but not meals. DSL/cable has a large potential for personal use, so it's unlikely the IRS would allow it. You could probably justify the Sunday paper. Here is the info from Pub. 17 on job search expenses: Job Search Expenses

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 cannot deduct these expenses if:

1. You are looking for a job in a new occupation,
2. There was a substantial break between the ending of your last job and your looking for a new one, or
3. You are looking for a job for the first time.

Employment and outplacement agency fees. You can deduct employment and outplacement agency fees you pay in looking for a new job in your present occupation. Employer pays you back. If, in a later year, your employer pays you back for employment agency fees, you must include the amount you receive in your gross income up to the amount of your tax benefit in the earlier year. (See Recoveries in chapter 12.) Employer pays the employment agency. If your employer pays the fees directly to the employment agency and you are not responsible for them, you do not include them in your gross income. Résumé. You can deduct amounts you spend for preparing and mailing copies of a résumé to prospective employers if you are looking for a new job in your present occupation. Travel and transportation expenses. If you travel to an area and, while there, you look for a new job in your present occupation, you may be able to deduct travel expenses to and from the area. You can deduct the travel expenses if the trip is primarily to look for a new job. The amount of time you spend on personal activity compared to the amount of time you spend in looking for work is important in determining whether the trip is primarily personal or is primarily to look for a new job. Even if you cannot deduct the travel expenses to and from an area, you can deduct the expenses of looking for a new job in your present occupation while in the area. You can choose to use the standard mileage rate to figure your car expenses. The rate for business use of a vehicle before September 1, 2005, is 40½ cents per mile. The rate for business use of a vehicle after August 31, 2005, is

Thanks Williams for your excellent criteria. It made me think of something else. I bought a suit for interviewing (specifically for job hunting in mind). I only wear it to interviews. I usually dress to church in my regular clothes. Can I claim the suit, shoes and tie as a business expence? Laugh you might, but once I went into an expensive clothing store boutique to look at suits. The saleman came up to me and asked me it I could afford it. I said, "Yes, I am a software engineer." He replied, "That explains it!" What about my cell phone? Can I claim half business use? I carry it for potential employers to reach me, not to chat, (I'm not that talkative a person). I still carry the free brand the Verizon gave me. The other reason I carry it is for emergencies, which was the big selling point!! What about my car for attending clients and meetings my employer sends me to (within an hour's drive). My current employer will reimburse me for a rental car, but not milage on my own personal car. I argued (in vain) why not just pay me for my car (a lower amount), but they won't. The problem with the rental car is that I have to pick it up the night before, and return it within 24 hrs. Enterprise (the car rental) will not pick me up. That's more work on my part than it seems worth. How much is the allocation for milage? Is that just gas, or does it cover depreciation as well? When "bono" said "employment agencies", I take it those that I have to pay for. I worked for companies which paid them, but in my contact the wording said something like, "if I leave within 2 years, I have to pay back expences incurred by the company in hiring me."

Nope, many court cases on this one. Suitable for wear elsewhere. FYI uniforms for military officers ARE NOT deductible and unlike enlisted personnel they must buy their own.

Possiblly - Cell phones are "listed property" do you have a log & can you document the "business use percentage"

The mileage rates for 05 were $.405 & .485 for last year depending on date of use. Again listed property and a mileage log is required to substantiate the deduction. Regards,

Mark Rigotti