For taxpayers seeking a new job in their same line of work, a tax deduction for some job search expenses may be available. First and foremost, these expenses must be related to a job search in a taxpayer’s current occupation, as expenses related to a search for a job in a new occupation may not be deducted. If an employer or third party provides reimbursement for the expense, it may not be deducted.
Here are some expenses that may be deducted:
- Employment and job placement agency fees;
- Costs of preparing, copying and mailing résumés to prospective employers;
Unsure of whether you should use the standard deduction amount, or take the time to itemize deductions? The answer is fairly straightforward; you should itemize deductions if your total deductions are more than the standard deduction amount. Also, you should itemize if you don’t qualify for the standard deduction. Taxpayers should initially calculate itemized deductions and then compare that amount to their standard deduction to determine which provides the greater benefit. A taxpayer may be subject to a limit on some itemized deductions if he or she exceeds the adjusted gross income limits.
It’s considered by many taxpayers to be one of the most frightening events that could happen related to their everyday business affairs. What is this frightening event? An IRS audit, of course. But is a tax audit really that scary in real life? The numbers reveal that only 1% of all taxpayers experience an audit, and of this one percent, about one in five result in a meeting with the IRS.
Presently, the IRS audits half as many taxpayers as it did five years ago. However, the amount of tax recovered per audit has increased. The IRS uses an elaborate computer selection process, auditing only those returns which will almost certainly yield some adjustment.