Do I Need Receipts for Unreimbursed Work & Job Seeking Expenses?

You cannot deduct expenses when looking for your first job or changing careers.

If the Internal Revenue Service questions a deduction, you may need to substantiate your expenses. The IRS requires proof that you paid the expense and the expense was allowable. Naturally, it is always best to have both types of evidence to support every deduction. However, when it comes to unreimbursed business or job-hunting expenses, the IRS accepts certain deductions for which you may not have receipts.

Mileage

If you base your deduction for mileage on the standard rate, you may not need to provide receipts for gasoline purchases. Maintain a log or diary in which you record the date, your mileage for the trip, the destination and your reason for making the trip. Enter expense information in your log on a timely basis, preferably on the same day but at least weekly. The IRS does not accept estimates.

Standard Meal Allowance

Rather than recording each meal expense, you may choose to deduct the standard meal allowance. The exact amount varies by city, but, for 2010, the standard rate for most U.S. locations was $46 per day. The IRS lists the rates by location in Publication 1542, which is available at the IRS website.

Expenses Substantiated by Other Records

Occasionally, you may incur expenses for which you cannot obtain a receipt. If you can substantiate the expense through other records, the IRS may allow the deduction. For example, suppose you are entitled to deduct the cost of a plane ticket to attend an interview. The evidence used to support the plane ticket may support your taxi fare from the airport to your hotel or hotel to the interview site. You also may be able to substitute a canceled check or bank statement for a receipt if you can support the expense with a diary or personal record proving the reason for the expense.

Minimal Expenses

If an expense is less than $75, the IRS may accept your log or diary as proof of the expense. However, lodging costs are not eligible for inclusion in this category. Examples of expenses that may be included are tolls, tips for hotel porters, snacks from the vending machine and pay telephone calls. The IRS does not require receipts for transportation costs for which receipts typically are not available, such as city bus or subway fares.

References

• Internal Revenue Service: Publication 463 – Travel, Entertainment, Gift and Car Expenses
• Internal Revenue Service: Topic 511 – Business Travel Expenses

Resources

• Internal Revenue Service: Publication 552 (01/2011) – Recordkeeping for Individuals
• Internal Revenue Service: Seven Tax Tips for Job Seekers