Let’s face it – no one enjoys being unemployed. Searching for a new job can be tiring, and quite frankly, depressing at times. However, as many unemployed workers soon find, it can also be expensive. Luckily, the Internal Revenue Service allows unemployed workers to deduct some of their job-hunting expenses. If you are eligible for the job-hunting expense credit, you may be able to recoup some of the money you spent to look for a job.
Not everyone will be eligible for the job-hunting tax break credit, but those who are may be able to deduct the following expenses:
If you are self-employed or an independent contractor, you still may be eligible for a tax break after filling out an EIN number application.
It is important to note however, you cannot deduct every single one of your job-hunting expenses. The IRS does not allow unemployed workers to deduct any costs that exceed more than two percent of your adjusted gross income. For example, if you made $30,000 last year and spent $800 on your job search, you would only be able to deduct $200 of your income (two percent of your income – the amount you spent on your job search). If you become unemployed, it may be wise to start your search for work as soon as possible – the IRS can deny your tax credit if it believes you have been out of work too long.
GovDocFiling can help you with all your tax filing needs, including job-related tax breaks. We can also provide you with an example of a tax ID number and teach you how to properly use it the next time you file. Learn more about potential tax breaks today by filling out this form.