Employment Tax Deductions

by | Jul 17, 2017 | Toby Talks Tax | 0 comments

I’ve been working this same job as Assistant Office Manager my entire life, so last week I decided it might be time to sniff out some other possibilities. Not that the perks at Law Offices of Christy Lee, P.C., aren’t much appreciated, you understand – those peanut-butter-dipped pretzel chips are quite whisker-licking delicious.  Then there’s that plush, sheepskin-lined doggy condo my boss gifted me.  And the stash of squeaky toys designed to help me stay in shape, the better to be mentally sharp and focused.

Opting to leave wasn’t easy.  It wasn’t the lack of bennies.  I wanted to expand my horizons and experience life on my own terms, away from the same ol’, same ol’, the steady and firm control at someone else’s paws.  So – behind my boss’s back, of course – I decided to check out other positions around town.

Not a smart move.

For one thing, it seems that there are a lot of dogs in Alaska, but a fairly limited number of different types of careers available:  musher, defender of property, establisher of aura, provider of entertainment, that sort of thing.  I figured if I were going to bite into lucrative employment, I would probably have to quit my job, devote 12 hours a day to the job search, and most likely relocate to an uncomfortable new dog house, which I would then have to spend many hours marking as my own.

And I would have to acquire all new skills for the new job.

Exhausting!  And that wasn’t the worst of it.

After some digging around, I found that that job search expenses are tax-deductible only under some very strict conditions:

  • The job search must involve employment in your current occupation.  It seems that Uncle Sam doesn’t want old dogs to learn new tricks.
  • If your new boss reimburses you for job-search expenses, such as placement agency fees, you cannot deduct any search costs at all.  If you have already taken the deductions when you receive the reimbursement, then you have to declare the reimbursement as income the year you receive it.
  • Travel expenses incurred in the search are deductible only for the portion of the trip dedicated to the job search, and only then if the trip was primarily designated a job-search trip at the beginning.
  • If there is a substantial break between your former employment and the job search, the search expenses are not deductible.
  • If the job search is for your first job, the expenses are not deductible.
  • Search expenses are claimed on Schedule A as one of your itemized deductions, which must total more than 2% of the adjusted gross income.

Any deduction with this many factors usually raises Uncle Sam’s eyebrows.  Any time Uncle Sam’s eyebrows go up, the IRS tends to get involved.  The risks of a tax audit probably aren’t worth the advantages of the deductions.

Besides, I really don’t want to leave my job at all.  I get to write my own blog, I get regular treats, and everybody who comes into the office gives me free doggie massages.  Where else would I be able to get all those benefits and still be able to snooze several hours a day on the job?