Deducting Job Search Expenses

If you’re looking for a new job in your same line of work, you may be able to claim a tax deduction for some of your job hunting expenses.

Here are seven items to know about deducting these costs:

  1. Your expenses must be for a job search in your current occupation. You may not deduct expenses related to a search for a job in a new occupation. If your employer or another party reimburses you for an expense, you may not deduct it.
  2. You can deduct employment and job placement agency fees you pay while looking for a job.
  3. You can deduct the cost of preparing and mailing copies of your resume to prospective employers.
  4. If you travel to look for a new job, you may be able to deduct your travel expenses. However, you can only deduct them if the trip is primarily to look for a new job. No deducting the week-long family vacation to Disney World if you have one interview.
  5. You cannot deduct job search expenses if there was a substantial break between the end of your last job and the time you began looking for a new one.
  6. You cannot deduct job search expenses if you’re looking for a job for the first time. This effectively eliminates the job search expense deduction for recent college graduates.
  7. You usually will claim job search expenses as a miscellaneous itemized deduction. You can deduct only the amount of your total miscellaneous deductions that exceed two percent of your adjusted gross income.

 

IRS Circular 230 Disclosure

Pursuant to IRS Regulations, we inform you that any tax advice provided or implied on this post (including attachments) is not intended or written to be used, and cannot be used, for the purpose of avoiding penalties that may be imposed on the taxpayer.

While the information contained in this post is believed to be reliable, we cannot guarantee its accuracy or completeness.