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Investing Answers Building and Protecting Your Wealth through Education Publisher of The Next Banks That Could Fail

Job Hunting Expenses

What it is:

Job hunting expenses are costs that job seekers incur while searching for a new job.

How it works (Example):

Job hunting involves research and networking using various resources and services. These resources and services include: employment listings, talent and staffing agencies and professional resume writers. Other examples of expenses are transportation, self-advertisement costs or anything paid directly as part of a job hunt.

Job seekers may be eligible to deduct job hunting expenses from their income taxes if they sought a position similar to their previous one. Unfortunately, recent university graduates are not able deduct job hunting expenses. Eligible job seekers may claim this deduction regardless of whether or not they find a new job.

For example, suppose Jane is laid off from her engineering job in 2011 and spends $500 searching for a new job before the end of that year. Regardless of Jane's success in finding a new engineering job, she may deduct $500 from her 2011 income tax return.

Why it Matters:

Potential tax benefits notwithstanding, job hunting expenses can be very high depending on the type of work an individual seeks. Since unemployment may leave them with little to no income, job seekers must know in advance how much money they can afford to allocate to job hunting expenses.