Archive for March, 2014

Job Search Expenses: What Can be Deducted

Thursday, March 27th, 2014

A client walks into an accountant’s office for help with an audit of his income tax return. “They’re disallowing all of my job search expenses. And I swear, I only took those trips to find work. Okay, there might have been a little bit of personal time, you know, vacation, mixed in, but it was mostly to find a job.”

Here’s his story: He retired many years ago but his pension shriveled when the economy tanked and his wife who had been working full time was forced to cut back due to health issues. To help make ends meet, he had to rejoin the workforce. His job hunt cost about $4,000, and he deducted it on his tax return on Schedule A Itemized Deductions as a miscellaneous deduction.

Everything looked in order. The primary purpose of the trips was to get a job, and he had receipts to prove the deductions. He also had all the miscellaneous paperwork to substantiate his purpose – resume, business cards and correspondence to and from prospective employers. He was not able to get a new job; employers told him he was too old. But according to the rules, job-search expenses are deductible even if employment is never achieved. So why was he getting audited?

The bad news is that one of the rules to qualify for the deduction is that, according to the IRS, “there cannot be a substantial break between the ending of your last job and your looking for a new one.”

This is just one of three basic rules:

  1. You can’t deduct expenses for a job search if you are looking for a job in a new occupation. So if you were a shoe salesman and you just finished your nursing degree and are now applying for nursing positions, you’re on your own with covering expenses.
  2. You cannot deduct expenses for a job search if you are looking for a job for the very first time.
  3. There cannot be a substantial break between the ending of your last job and your search for a new one.

Let’s say you are looking for work and you qualify to deduct the expenses, here’s what you may deduct:

  • Employment and outplacement agency fees. If you get the job and an employer reimburses you for the fees, you must declare that amount as income
  • Resume preparation expenses including postage and overnight mail charges
  • Fees you pay each year to keep a license active
  • Travel and transportation expenses – keep a mileage log. Note that travel expenses include any laundry or dry cleaning bills racked up while you’re on the road
  • Meals and lodging while away from home. Keep your receipts or use the per diem cited on the IRS website for the cities you visit
  • Education expenses to improve or maintain skills in your present occupation

These are the basic categories of expense but the list in not all-inclusive. The IRS allows any expense that is considered “ordinary and necessary,” as well as legal.

In other words, bribing a person to hire you is considered an illegal activity, and the deduction will not be allowed. But hiring someone to revamp your resume or a career coach to help you manage your job search will be.

Why Won’t They Hire Me?

Thursday, March 6th, 2014

You’ve applied for every job out there, and no one is getting back to you. Why? Who cursed you with this jobless existence?

It may actually be you. Yes, for all your activities, your strategies, and your button clicking, at the heart of it all, you might be the cause of your own job search fail. How can you be sure? I’ve compiled a list of the most common mistakes people make when applying for a job. Make sure you’re not falling for one of these classic job search blunders:

1: Typos!

The number one biggest mistake people make (and one of the easiest to avoid) when applying for jobs is having typos on their resumé. No matter what the job is, no one wants to hire someone who doesn’t even use spell check. Or even worse, if you’ve made a grammatical error that leads to a humorous misunderstanding (example: occupation – internet booger instead of blogger); that’s just awful. It’s not the end of the world, of course, if you spell your own name wrong on your C.V. It is if you then send it out to everyone, however. Just spend two or three minutes proofreading what you’ve written. If you’re unsure, get a friend to look at it for you or leave it to the professionals.

2: Not having an online presence or having a bad one.

If you’re applying for high-end jobs, potential employers are going to want to know as much about you as possible. If they make a quick search on Google and they can’t find you, it won’t look good. They want to see for themselves the work you have done in the past and what you’re capable of. Some ideas for getting your online presence rolling: set up a LinkedIn account and create profiles on freelance and industry websites.

On the other hand, if your potential employer looks you up and finds a picture of you hitting a bong, it’s going to be even worse than having no presence at all. By all means, post your social life online, but make sure it’s private. It should be just for your close friends. Facebook allows you to view your profile as a member of the public would see it. You should definitely try this out, so you can see what potential employers see and make sure you’re not revealing more about yourself to them than you might want.

3: Using an informal email address.

No matter the situation, you should always have a professional email address for use on your resumé. If you were hiring, would you pick “John.Doe” or “iLikeCars93” or “fluffybunnies”? Choose something with your name in it and if you need to include numbers, select the year of your birth or graduation from college (i.e., george.hamilton1990@gmail.com).

4: Not following instructions.

When you’re reading so many job descriptions because you’re busy applying for everything on the internet, you probably don’t read each of them thoroughly; you’re likely just skimming before applying. However, you should always read each description all the way to the end. Often there will be instructions included, sometimes just to check to be sure you’ve actually read it! Employers won’t want to hire someone for a job who can’t even follow the simple instructions to apply for it.

5: Focusing solely on jobs posted online.

It’s incredibly convenient having all those jobs available there on one page (whether Monster or CareerBuilder or one of the aggregate search engines like Indeed), saving you the effort of wandering from place to place just to be rejected. However, it isn’t perfect. There are plenty of places hiring that don’t put their jobs up on the internet: some prefer face-to-face interviews straight away; some just don’t want the hassle of receiving and sorting through thousands of random responses like yours. You might be missing some great opportunities if you stick only to the online job boards. Branch out: seek referrals from people already working at a company or reach out to hiring managers directly at places that don’t seem to be hiring… you may be surprised by the roles on offer.

6: Failing to ask questions in an interview.

We’ve all been there: they ask if you have any questions at the end of the interview and you have no idea what to say. Or you just don’t want to make a fool of yourself by asking a stupid question. So you wing it: “no, I don’t have any questions”. The problem here is that you seem uninterested and uninformed. You want your future employer to be interested in you, and yet you don’t seem to be interested enough in the job or the company to ask questions about them! Have a few good questions prepared in advance about the role, the company, etc. so they know you’ve been doing your homework.