Can I write off home office expenses after getting laid off from my tech job?

Thanks for the quick response. That's pretty disappointing to hear. So even though these expenses are 100% for finding employment, there's no way to deduct them unless I'm actually earning income as a contractor or freelancer?

That's correct. Under current tax law, job search expenses aren't deductible even when they're completely employment-related. If you do end up taking on freelance or contract work while job hunting, then you could potentially deduct those expenses against that income on Schedule C. Regarding your books, there's also something called the Lifetime Learning Credit which might help if you're taking courses to improve your skills. It wouldn't apply to just buying books on your own, but if you're taking formal classes, it's worth looking into.

How exactly does taxr.ai work with receipts? Do you just upload them or do you need to categorize everything first? I've got a folder full of receipts from my job search and I'm not sure if they'd count for anything.

I'm skeptical about these AI tax services. Did it actually save you money compared to just using regular tax software? I've tried similar tools that promised the world but ended up giving me the same results as TurboTax.

The receipt process is super straightforward - you can either upload photos/PDFs or connect it to your email to automatically find receipts. It categorizes everything for you and explains which ones might be deductible based on your situation. It saved me a ton of time compared to manually sorting everything. It definitely saved me money compared to standard tax software. Regular tax software doesn't really guide you through optimizing your specific situation as someone laid off from tech. The AI identified that I could classify some of my activities as freelance consulting which allowed me to legitimately deduct about $2,800 in expenses that I would have otherwise missed.

Wait, this actually gets you through to a real IRS person? How does that even work? I thought it was literally impossible to reach them by phone these days.

This sounds like BS honestly. I've tried everything to get through to the IRS and nothing works. How much did you pay for this "service" that magically gets you through when millions of others can't?

Yes, it actually connects you to a real live IRS agent! The service basically navigates all the phone menus and waits on hold for you. When they reach an agent, you get a call to connect you. It's like having someone wait in line for you. The service worked exactly as advertised. I didn't believe it would work either until I tried it. They don't charge you if they don't get you through to an agent, so there's no risk. I don't remember the exact price, but the time saved was absolutely worth it considering I had tried for days on my own without success.

That's really helpful! I've actually been considering taking on small coding projects while job hunting. If I make say $2,000 from freelance work, could I deduct the full $2,000+ in expenses or am I limited to deducting only up to what I earned?

You can deduct legitimate business expenses up to the amount of your business income. If your deductions exceed your income (creating a loss), things get more complicated with the "hobby loss" rules. Generally, if you show a profit in 3 out of 5 years, the IRS considers it a legitimate business rather than a hobby. In your first year, you can typically claim a loss, but if you continue showing losses year after year, the IRS might classify it as a hobby, which limits your deductions. So if you make $2,000, you could potentially deduct $2,000+ in expenses, but the excess would create a business loss that has additional considerations.

That's extremely risky and not recommended! The IRS doesn't recognize "professional job seeking" as a business activity that generates income. To file a Schedule C, you need to be engaged in an activity with the intent to make a profit through providing goods or services. Simply looking for a job doesn't qualify - you need actual self-employment income from some type of business activity. Trying to classify yourself as a "professional job seeker" would likely trigger an audit and could result in penalties for filing an incorrect return.

This is really comprehensive advice! I'm curious about the documentation aspect you mentioned. What kind of records should someone keep to show the percentage split between job search vs. income-generating activities? I'm thinking about starting some freelance work while job hunting, but I want to make sure I'm tracking everything properly from the beginning. Should I be logging hours spent on each activity, or is there a simpler way to establish that business use percentage? Also, when you say "timing" matters for equipment purchases - if I buy equipment before I start earning freelance income but then use it for that work, does that completely disqualify it from being deductible?

Great questions! For documentation, I keep a simple spreadsheet tracking hours spent on different activities. For example, if I spend 20 hours/week job searching and 10 hours/week on freelance work, that's roughly a 33% business use ratio for my home office equipment. You don't need to be obsessively precise, but having some reasonable method to show the split is important. For equipment purchases, the timing isn't necessarily a disqualifier, but it's cleaner if you buy after starting freelance work. If you bought equipment before freelancing but then use it for business, you can still potentially deduct based on the business-use percentage from when you started earning income. The key is that the deduction is based on when you actually start using it for business purposes. I'd recommend starting that documentation tracking right away, even before you begin freelancing. It shows good faith effort to properly allocate expenses and gives you a clear paper trail if questions ever arise. My CPA said having contemporaneous records (tracking as it happens vs. reconstructing later) is much stronger from an audit perspective.