HOW TO BE A CAREER COACH AND GET UNCLE SAM TO PAY YOUR FEE
(July/August 2006 Issue)

Job hunters who need your coaching are often strapped for cash. Here's a way you can get Uncle Sam to pickup almost 1/3 of the tab!

Taxes: The Invisible Bill
Because taxes are withheld - most people never see them. In most people's minds it's hard to connect the cause and effect relationship between the amount of money you get on April 15th, and the tax-favored spending you do today. And even those who do appreciate a tax break won't see it unless they know how to file for it, and how to be IRS audit-proof! Here's how to educate your prospect to become aware that your $125/hour fees are reduced to $90.

Taxes: Making the Dollars Appear
First add up job search expenses. $500 Travel Expenses. Let's say a local-area job search has 40 interviews (most networking; some job interviews). At a modest 25 miles round trip, that's 1000 miles. At standard 40¢/mile plus parking, tolls, taxi rides, etc., you've got yourself at least $500.

$1,000 Job Search Expenses.
o résumé printing, letters, postage, internet access, job posting site fees.

• subscriptions to special trade magazines, dues to relevant associations,
• several lunches and dinners while on job search,
• printer ink cartridges, perhaps part of a computer/printer upgrade, paper,
• phone expenses, FedEx deliveries,
• networking dinners, meetings, social networking-events,
• pens, calculator, and other office expenses,
• job hunting books, motivational tapes and
• Anthony Robbins' Fire Walking seminar (or trainings like that).
• Plus anything else you can justify as a job search expense.
  We'll estimate that as $1,000. So, travel and other expenses total, conservatively, $1500. $1000 to $7000 (optional) career and job-search coaching. A comprehensive coaching package where your career advisor will stay right with you through thick and thin all the way to your new job, promotion, or your own business. A client might pay you $1000 to $7000 depending on how good you are. For ease of calculation, let's pick a number in the middle, say…
  • $1500 with no coaching help, and
  • $5000 with coaching help.

Calculating Your Refund

• Fact one: You can only deduct the amount that exceeds 2 per cent of your income.
  
• Fact two: The tax rate for most people is roughly 28 per cent.
  I'll use a $50,000 income as an example. For more accurate estimate, enter this information on line 20 of Schedule A of your tax return. You'll find all the detailed instructions in government IRS publication #17, available at http://www.irs.gov/pub/irs-pdf/p17.pdf.

EXAMPLE 1: No Career Coaching Help. Refund: $140. Total expenses $1500. $500 is the amount above 2 per cent of client's income ($1000); 28 per cent of $500 is $140.

EXAMPLE 2: Yes, Career Coaching Help. Refund: $1,120. Total expenses $5000. $4000 is the amount above 2 per cent of client's income ($1000); 18 per cent of $4000 is $1120. Uncle Sam pays between $140 and $1120 - wow! Here's how to document expenses in a way that takes practically no effort and hardly any time as long as your client follows my receipt-by-receipt method all along the way. The two things you must collect to be "audit proof" are: annotated receipts and a mileage log. Correctly handled receipts will do two things at once. They'll document both the amount, date, and also the job-search related purpose for your expenses. Credit card statements are not enough! You need actual receipts and you must record the purpose/relationship to your job search within 48 hours of the expense. Make it no-brainer simple this way: whenever you spend money related to your job search, get a receipt, pull out a pen, and right then and there, at the point of purchase, write on the back of the receipt what it was for. When you put your credit card or your change back in your wallet, put the annotated-on-the-back receipt in there, too. If it's a meeting, you need to also write the name of the person and a 3-10 word description of the job-search related activity, such as: "Job interview, Johnson, ABC Corp," "Referral Networking, John Doe," Again, do that at the point of purchase - it will take no measurable extra time at all.

Later, at home, occasionally dump your annotated receipts into a box or envelope. Think to yourself "28 per cent Cha-ching!" I.e. when you put in a bunch of receipts and you guess there's, say, $125 worth of expenses, think, "Ahhh, cha-ching! $35 back from my friends at the IRS!" (28 per cent of $125 = $35) Voila! It takes very little effort and no extra time. TIP: Keep the receipts in a cool dry place because many receipts are on thermal paper and will fade in the heat.

IRS's favorite "Gotcha": The Mileage Log
If you make general notes in your appointment calendar with the approximate miles driven to an interview or networking event - that's not enough! The mileage log is a potential soft spot that the IRS will take advantage of if possible.

Remember, a tax deduction is no good unless you have documentation that meets IRS's standards. If you are going to claim driving mileage expenses, you must have a log that contains the following information, and this information must be written down within 48 hours of completion of the trip to include: Beginning odometer; Ending odometer; Date; Job Search Purpose. Simple method: keep a pen and notebook in the glove compartment. Each job-search related trip write down the starting odometer, the purpose of the trip, and the ending odometer. As you do, think, "Ahhh, 44.5 cents a mile refund from Uncle Sam. He just bought my gas!" [This number fluctuates. Find the current rate at http://www.biztaxadvisor.com/IRS-mileage-rate.html.]

On April 15th, just add up the box of receipts, calculate your miles, and collect your refund! And when you quote your Career Coaching price to your prospect, remember to say, "And your Friends at the IRS will give you back 28 per cent of your investment in the form of a tax refund."