Job Hunting expences

[deodiaus]

Does anyone know of a good summary of what sort of job
hunting expenses are and are not covered? Any good links to
the web or recommended books?

For example, I traveled 800 miles for one job interview. I
have a plane ticket stub, as well as gas receipts for the
return trip. I have some credit card listings from meals.
I have an entry in my diary, as well a secretary's list of
the people with whom I interviewed, for verification in case
of audit.

Unfortunately, not all of my job hunts were as well
documented. For example, I dropped in on a potential client
when on the other side of town. I chatted briefly and left
a resume and business card, but had less tangible proof.
Can I claim mileage, parking fees, and lunch? Can I deduct
the use of my DSL which I use to purouse www.monster.com,
www,dice,com, and etc. I really don't use the DSL for
"entertainment," largely because I find typing and the mouse
a great strain on my wrists, and want to put off any onset
of carpel tunnel. I do have friends who surfs the web like
crazy while at my place for a football game, but I take a
"don't ask, don't tell" policy. How about the use of TV
cable for Bloomberg and other info. Not so much for job
hunting, but to keep up on my investments and to get
potential leads?

I have a newspaper subscription just for the Sunday Help
Wanted Ads. In two years, I have gotten about 2 leads, which
is a low yield, but for anyone who has been job hunting, all
leads are bad. I could tell you how much time I have wasted
cold calling and mingling in "proiessional societies" and
other silly activities. Just the other day, I went to a
"computer career fair" which was a big waste of my time. I
dressed up, printed many copies of my resume, and drove 80
miles. It was a waste of hours of time because most of the
jobs were for either very specific fits or entry level
positions paying peanuts. The really depressing part was
meeting lots of other "older" job seekers, most of whom
were probably over qualifed for the jobs that they were
seeking. I met a middle aged Indian guy with a 5 degrees
(including a J.D. from India) and 14 years with IBM. He
wasn't a stellar personality, but I felt like this guy
should have a choice of activities. Another time, I went to
for job interview and started talking with the hotel manager
at the Econo-Lodge in a part of town where I was afraid of
being shot. He was a 50 yo foreigner with a M.Sc. in Mech
Eng. Yes, I might waste time pursuing opportunities, but at
least something still comes up.

Ok, let's hear about taxes, deductions, and legality?

 

[L K Williams]

Does anyone know of a good summary of what sort of job
hunting expenses are and are not covered? Any good links to
the web or recommended books?

Ok, let's hear about taxes, deductions, and legality?

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

 

[bono9763]

Basically, you are allowed expenses for employment agencies,
resume copying, travel, and transportation expenses. For
travel (=3Dout 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
(=3Din 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.

R=E9sum=E9. You can deduct amounts you spend for preparing
and mailing copies of a r=E9sum=E9 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 40=BD cents per mile. The rate
for business use of a vehicle after August 31, 2005, is
48=BD cents per mile. See chapter 26 for more information.

 

[Deodiaus]

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."

 

[Seth Breidbart]

wrote:

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?

No; they're usable for ordinary purposes, even though you
choose not to so use them.

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.

Unreimbursed employee business expenses, with a haircut
before they do you any good.

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?

It's supposed to cover all expenses.

Seth

 

[Mark X. Rigotti, CPA]

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?

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.

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!!

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

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?

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