Tax Deductions for Your Job Search

Looking for a job can be expensive. The cost to print resumes, travel to job interviews, or conduct phone interviews can add up. But, if you saved all of your receipts you could get money back around tax time. It's a little-known fact that the IRS will allow you to make certain tax deductions if you're looking for a new job. However, there are a few stipulations you need to be aware of before you submit your 2005 taxes.

You cannot deduct these expenses if:

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

Deductions are allowed under these stipulations:

• Employment and outplacement agency fees. You can deduct employment and outplacement agency fees if you're looking for a new job in your present occupation.
• Employer pays you back. If your former 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.
• 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.
• Résume. You can deduct the cost of preparing and mailing copies of a résume to prospective employers if you are looking for a new job in your present occupation.
• Travel and transportation expenses. Air travel within the United States - for a job interview - might also be tax deductable. 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 looking for work determines whether the trip is personal or to look for a new job.
  
  What's more, you can take deductions for travel - by car - if it was job-search related. 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 40 ½ cents per mile. The rate for business use of a vehicle after August 31, 2005, is 48 ½ cents per mile. See Publication 463 for more information on travel and car expenses.