Job Search Deductions

In the latest issue of its Summertime Tax Tips series, the IRS addresses deductions that may be claimed by job-seekers that could supply some tax relief come April:

1. The deduction is allowed only if you are searching for work within the same field in which you currently work.

2. Money spent on preparing and mailing resumes is deductible.

3. Employment agency fees are also deductible.

4. Money spent traveling in search of employment within the same occupation is deductible as long as the trip is undertaken primarily for the job search.

5. These types of job search deductions are not allowed if there was a substantial break between the end of the last job and the beginning of your search.

6. These types of deductions are not allowed for first time job searches (i.e., only for reemployment purposes).

7. You can claim job search expenses that amounts to more than 2% of your adjusted gross income.

Summer Jobs

Remember your first legitimate job, that first paycheck?  If you are anything like me, you were probably mystified by the discrepancy between your mental calculations and the actual net amount on the check.  Not much can prepare you for that hard reality.  For many students, their first tax lessons are learned when they land their first summer job.

The IRS offers six tax tips for students starting summer jobs:

1. Fill out a Form W-4 so your employer will know how much to withhold.

2. All tips are taxable.

3. Money earned from odd jobs are taxable.

4. Pay self-employment tax if earnings are $400 or more.

5. Food and lodging allowances paid to ROTC students participating in advanced training are not taxable, but active duty pay is taxable.

6. Generally newspaper carriers under age 18 are not subject to self-employment tax.