Looking for Work? Plan a Money-Smart Job Search
By Jason Alderman
A successful job search goes well beyond snagging the title and the paycheck. From the day you start looking until the day you’re hired, there are strategic and financial issues to consider that may be more valuable to you in the long run.
To start, job seekers should always begin with a plan to promote themselves both in person and online, and some aspects of that process may be tax deductible. Keep in mind that if you are already employed, you may want to consider certain timing and legal issues that will define how and when you search. And finally, taking the job requires a close look at benefits.
It makes sense to discuss any potential job search with a qualified financial advisor who can evaluate your current financial circumstances as well as offer tips on how to strengthen your preparations for retirement and other goals.
Start with market research and improving your public profile. A recent Jobvite study notes that Facebook, Twitter and LinkedIn profiles are the ranking social media options reaching employers and for industry hiring and pay projections, the U.S. Bureau of Labor Statistics’ (BLS) Occupational Outlook Handbook (http://www.bls.gov/ooh/) is a wide-ranging and constantly updated online resource for that data.
Check your credit reports. Remember that many employers screen applicants’ creditworthiness as part of their candidate review. Go to AnnualCreditReport.com (https://www.annualcreditreport.com/index.action) for free access to reports from the three major credit agencies – Experian, TransUnion and Equifax – to check for potential errors or credit negatives you need to repair.
Evaluating search expenses and potential tax savings come next. Here are a few of the current rules listed by the IRS (http://www.irs.gov/uac/Newsroom/Job-Hunting-Expenses). Make note that your current job status will affect how the rules apply to you:
- Expenses may qualify as deductions only for a job search in your current line of work. You won’t be able to deduct expenses for a job search in a new occupation.
- You can’t deduct job search expenses if you’re looking for a job for the first time or if there’s been what the IRS calls a “long break” between your last job and beginning your search for a new one.
- If you travel to look for a job in a qualified job search, you may be able to deduct the costs of all or part of the trip.
A job search is always a good time to revisit current budgeting and savings goals. For example, you might want to do more specialized budgeting (http://www.practicalmoneyskills.com/calculators/budgetgoals) as you aim for a particular salary offer.
You’ll also want to consider the timing of your search to exhaust benefits you’ve earned at your current employer. You will see many employees schedule a job search after annual bonuses are paid or after they’re able to spend out in tax-advantaged Health or Flexible Spending accounts (HSAs or FSAs) for qualified health care, dependent care or other approved benefits. Also, before you start applying, it might be worthwhile to review confidentiality or non-compete agreements you signed at the time your current employer hired you in case those agreements might restrict any element of your search.
Sometimes job offers distract workers from taking a thorough look at the value of potential benefits (http://www.practicalmoneyskills.com/employerbenefits). You may not get all the details until your actual starting date, but see whether your future employer’s human resources department can share details of the health, retirement or tax-advantaged benefits programs they offer. Above all, find out how soon you’ll be eligible to sign up for your new employer’s 401(k) retirement plan.
Finally, touch base again with your financial advisor before you accept to make sure you’ve got all the information you need. You will need to do parallel retirement planning if you are to retire successfully, and qualified advisors can also assist with transferring previous-employer retirement assets and suggestions on ways to use other work-related benefits efficiently.
Bottom line: When searching for a new job, go beyond the paycheck issues to research tax and benefit issues that can make a good job a great one.
Jason Alderman directs Visa’s financial education programs. To Follow Jason Alderman on Twitter: www.twitter.com/PracticalMoney.