Tax Deductions and Credits Life Events Series: How Your New Job May Save You Money at Tax Time Read the Article Open Share Drawer Share this:Click to share on Facebook (Opens in new window)Click to share on Twitter (Opens in new window)Click to share on LinkedIn (Opens in new window)Click to share on Pinterest (Opens in new window)Click to print (Opens in new window) Written by Jim Wang Published Feb 1, 2013 - [Updated Jul 12, 2019] 3 min read Many people don’t realize that the expenses that come with work can be tax deductible. However, your new job could actually save you money come tax time. Job Hunting Costs Did you start a new job in 2012? If so, you might be able to deduct the costs related to your job hunt. There are some rules, though: You can only take deductions if you were looking for a new job in the same field. You can’t take the job hunting deduction if you were looking for your first job. Your costs must exceed 2% of your AGI, and you can only deduct the amount over that 2%. There cannot have been a substantial break between when your old job ended, and you began looking for a new job. If you meet those conditions, you can deduct the costs of career counseling, hiring a head hunter, resume help, cost of mailings and phone calls, and the cost of travel to go to job interviews. Remember, these are deductions from your income, when you itemize, and not a tax credit. What this means is that if you spend $500 for someone to review your resume, you don’t get $500 off your tax liability. You get $500 off as a deduction to the extent that all of these expenses exceed 2% of your AGI. Other Unreimbursed Employee Costs You can also take a tax deduction for costs related to your employment that you aren’t reimbursed for by your employer. This tax deduction is available whether you are an old job, in a new job, or starting your first job. Some of the expenses that you might be able to deduct include: Depreciation on equipment, such as a cell phone or computer, that you bought in order to do your job. Dues to professional societies, unions, and chambers of commerce. Employment-related education costs The cost of obtaining licenses related to your profession. Travel costs related to a business trip, including passport fees. Tools and other supplies that you use for your work. The cost of uniforms, and how much you have to pay to keep them properly maintained. Subscriptions to trade magazines and professional journals in your field. Home office expenses, if you have a designated area exclusively related to work as you telecommute. Once again, your ability to deduct expenses is subject to the 2% rule. So, if your AGI is $42,000, your costs need to be at least $840, and you can only deduct the amount above that number. So, if you spent $1,000 on employment related expenses, you can only deduct $160 from your income. You can only claim expenses for which you were not reimbursed. If the company is paying for your cell phone, or if it covers your business travel expenses, you can’t deduct those. Anything the company pays for can’t be deducted from your taxes, it’s considered double dipping and is not permitted. If you found yourself paying costs related to your new job, you might be able to reduce your tax liability to help offset some of your expenses to keep more money in your pocket. TurboTax will figure out the employee deductions your eligible for based on your answers to simple questions. Previous Post What is the current IRS status on processing returns? Next Post 6 Commonly Missed Tax Benefits for Military Written by Jim Wang More from Jim Wang One response to “Life Events Series: How Your New Job May Save You Money at Tax Time” Can you get creditforhotel stay if company does not reinburce for the cost and he just sarted this new job Reply Leave a ReplyCancel reply Browse Related Articles Tax Deductions and Credits Summer Job Search Expenses That Can Save You Money Tax Deductions and Credits Your Summer Travel Can Save You at Tax Time Tax Deductions and Credits Tax Tips: In Search of a Job? Your Job Search Expense… Business Income Is This Tax Deductible? Tax Tips for Landlords and Vaca… Life What Medical Expenses are Tax Deductible? Tax Deductions and Credits Is This Deductible? Biking, Driving, and Busing to Work… Tax Deductions and Credits Real Talk: I Recently Lost My Job. Am I Able to Deduct … Tax Deductions and Credits Tax Considerations for Cancer Patients Tax Deductions and Credits How Does Volunteering for a Charity Affect My Taxes? Tax Deductions and Credits Are You a PTA Parent? That Volunteering May Just Pay Of…
Can you get creditforhotel stay if company does not reinburce for the cost and he just sarted this new job Reply