Don't Mess With Taxes

You thought it was the perfect job. And it was. For a while.

But it's time to move on because, like Jimmy McGill in AMC's "Better Call Saul," your way of doing business is just too flashy for your company's more staid culture.

Good news. The Internal Revenue Service can help you find a new job ... as long as you follow the tax rules.

Specifically, there are three requirements to write off your job hunting costs.

1. You must itemize.
The costs related to finding another job are included in the "Job Expenses and Certain Miscellaneous Deductions" section of Schedule A. If you don't itemize already, then these job hunt costs probably aren't going to do you any tax good.

Why not? Because if all you have to deduct on Schedule A is job hunting costs, they likely aren't going to be enough to exceed your standard deduction amount. For the 2015 tax year, that's $6,300 for a single filer; $9,250 for a head-of-household taxpayer; and $12,600 for a married couple filing jointly.

For 2016, inflation has a minimal effect on those standard deduction amounts. It's still $6,300 for singles, the same as in 2015; $9,300 for heads of households, up slightly from last year; and, as in 2015, still $12,600 for married joint filers.

You always want to use the deduction method that provides the larger amount. If that's the standard deduction, then take it and forget about writing off your job search.

2. Only a percentage is deductible.
OK, you do itemize. And you've spent a pretty penny looking for a job that is a better fit for your colorful style (and attire!).

It's time to add the job hunt costs up and add them to your Schedule A.

But note that not all those miscellaneous expenses will count. You can only deduct the amount that exceeds 2 percent of your adjusted gross income (AGI).

If you're an unmarried, either still single or divorced, taxpayer with an AGI of $50,000, then your total miscellaneous expenses must be more than $1,000 to be deductible. And then, only the amount over one grand counts as your deduction.

3. You must look within your current career area.
Uncle Sam isn't your parent. He won't subsidize your career change.

In order for your job search expenses to be allowable deductions, you must be looking for a job in the same field as the one you have or most recently held.

Sorry, new graduates. Your expensive efforts to find your first post-college job aren't tax deductible.

What's deductible: If you can comply with the job search tax deduction rules, then hang onto or dig out all those receipts. 

This includes such things as employment and job placement agency fees, résumé preparation, mailing your info to prospective employers, and travel for job interviews, both locally and out of town trips.

I'm not telling you to be overly aggressive when it comes to making claims, but if you're comfortable arguing for them, then other expenses, such as books to help you learn about, for example, how to nail that job interview, also could count.  

Basically, anything that you can legitimately argue -- and convince an IRS auditor -- is an expense that helped in your job search, even if you didn't land the job, is potentially deductible

Good luck in finding new employment.

And remember, you probably can just tender your resignation and not have to go to the extremes Jimmy did to get out of his workplace contract.

You also might find these items of interest: 

• Working for the tax-saving weekend
• Tax tips for the self-employed small business owner
• The mess, and deductibility, of job-related moving costs