1Qualification for Job Seekers Tax Deductions

The foremost criterion for a job seeker's tax deduction is that your expenses must have been spent looking for a job that is within your current occupation. Persons looking for work positions in new occupations are ineligible for these tax breaks and may not deduct any incurred expenses when making their tax returns.

2Deducting Outplacement and Employment Agency Fees

It is only possible for one to make deductions for outplacement and employment agency fees paid while seeking a job in his/her current occupation. In the event that one is successful in getting the desired job and has the employment agency fees paid back by the employer in a later year, it is a mandatory requirement that this amount be included in the gross income up to the amount of tax break/benefit received in the earlier year.

3Tax Breaks for Resumes

In the quest for a new job a person is, in most cases, required to prepare multiple copies of his/her resume and subsequently mail the same to the various prospective employers that have been identified during the job search. The IRS has it clear that the expenses incurred for preparing and mailing these resume copies may be deducted but only if the new job being sought is within your present occupation.

4Tax Breaks for Travel

Sometimes you may be required to travel to another area while seeking a new job. In this case it is possible for you to make deductions of the travel expenses incurred to and from the said area. This is however only applicable under two conditions - that the job in question is within your present occupation and that the primary reason for making the trip was to find the new job position. The determination of the nature of the trip, i.e., for personal reasons or for job-seeking reasons, is made by comparing the times spent on personal activity and that spent actually looking for the new job.

Two situations where tax breaks for job seekers cannot be applied:

5Interval Between Job Searches

It is not possible for job search expenses to be deducted from one’s tax returns if there has been a substantial break between the termination of one’s last job and the time that he/she starts looking for a new employment position.

6First-Timers

Job seekers' tax breaks are not applicable for persons who are seeking jobs for the very first time.

7Seeking a Job in Your Line of Work

For job seekers looking to find new jobs in the same line of occupation they are currently engaged, the deductions permissible include phone call expenses, resume preparation, copying and mailing expenses, career counseling, etc. It is not necessary for you to be out of a job for some of these costs to be qualified as deductible expenses. In such a case, however, the only expenses that will count are those that exceed 2% of your income. For persons who have been unemployed in the past year, it is necessary for them to have their unemployment compensation reported as income. The federal tax portion of your liability in 2009 is however lessened by $2400. It is important for such persons to visit the IRS website - http://www.irs.gov - for clarifications on independent contractor work, bonuses, severance pay, 401K and/or other potentially taxable pension distributions.

8A Closer Look at Deductible Expenses

In terms of the job seekers' tax breaks, deductible are expenses for resume preparation, copying and the postage costs incurred in sending these copies to various companies. For the deductible travel expenses the costs that can be considered include overnight lodging wherever applicable, airfares, car mileage, car rentals, meals, etc. It is important to retain the receipts for all these expenses. Other expenses include any employment agency fees paid and any retraining costs incurred as you make an effort to be more competent for a possible job opening. All the deductions must be properly itemized, receipts retained for reference, and deductions made only for amounts that exceed one’s adjusted gross income by 2%.

More clarifications on these job seekers' tax breaks can be accessed from IRS Publication 529, Miscellaneous Deductions on http://www.irs.gov. You can also call 800-TAX-FORM begin_of_the_skype_highlighting              800-TAX-FORM      end_of_the_skype_highlighting (800-829-3676). These resources are also available:

www.irs.gov/pub/irs-pdf/p529.pdf and www.irs.gov/individuals/article/0,,id=219269,00.html.

For further reading you can follow the links provided below:

http://taxes.about.com

http://usgovinfo.about.com/od/incometaxandtheirs

http://jobsearch.about.com/od/employeebenefits