Good news for last-minute tax filers: The money you've invested in your job search may be deductible on your federal income taxes - and that includes your Pongo membership costs. Of course, nothing is simple when it comes to the tax code. With the April 15 tax deadline mere days away, here's what you need to know about the tax deductibility of job search expenses.
The federal government offers an income tax break for something called "Unreimbursed Employee Expenses," which includes money spent preparing and sending resumes as part of a job search. In general, you can probably deduct some of your job search expenses if:
- You itemize deductions on Schedule A of your Form 1040; and
- Your Unreimbursed Employee Expenses exceed 2% of your adjusted gross income (AGI); and
- Your AGI is less than $78,200 (or $156,400 if you are "married filing jointly").
If you meet these criteria, you can deduct the expenses that exceed the 2% threshold.
If your AGI is $50,000, the first $1,000 in expenses is NOT deductible (2% of $50,000 = $1,000). But anything you spend over $1,000 is deductible. So if you have $1,050 in expenses, you can deduct $50.
That may not sound like much, but remember, this is not JUST your job search expenses. You can combine many other work-related expenses with your job search expenses to exceed the 2% threshold.
Eligible "Unreimbursed Employee Expenses" include the following:
- Travel, baggage charges, meals and lodging, or cleaning and laundry expenses;
- Dues to chambers of commerce and professional organizations;
- Legal fees related to doing or keeping your job;
- Licenses and regulatory fees for your trade, business, or profession; and
- Tax preparation fees.
Of course, since we're referring to the tax code, there are a few other caveats. You cannot deduct job search expenses if you're looking for a job in a new occupation, if there was a substantial break between the end of your last job and the start of your job search, or if you're looking for a job for the first time.
If you're not sure what you spent on your Pongo membership in 2007, contact the Pongo Customer Support Team.
For complete information on these deductions, consult your tax advisor or read this IRS publication.