Job
Search Expenses Can be Tax Deductible
Summertime is the season that often leads to major life decisions, such as
buying a home, moving or a job change. If you are looking for a new job that is
in the same line of work, you may be able to deduct some of your job hunting
expenses on your federal income tax return.
Here are seven things the IRS wants you to know about deducting costs
related to your job search:
1. To qualify for a deduction, your expenses must be spent on a job
search in your current occupation. You may not deduct expenses you incur while
looking for a job in a new occupation.
2. You can deduct employment and outplacement agency fees you pay while
looking for a job in your present occupation. If your employer pays you back in
a later year for employment agency fees, you must include the amount you
received in your gross income, up to the amount of your tax benefit in the
earlier year.
3. You can deduct amounts you spend for preparing and mailing copies of
your résumé to prospective employers as long as you are looking for a new job
in your present occupation.
4. If you travel to look for a new job in your present occupation, you
may be able to deduct travel expenses to and from the area to which you travelled.
You can only deduct the travel expenses if the trip is primarily to look for a
new job. The amount of time you spend on personal activity unrelated to your
job search compared to the amount of time you spend looking for work is
important in determining whether the trip is primarily personal or is primarily
to look for a new job.
5. You cannot deduct your job search expenses if there was a
substantial break between the end of your last job and the time you begin
looking for a new one.
6. You cannot deduct job search expenses if you are looking for a job
for the first time.
7. The amount of job search expenses that you can claim is limited. To
determine your deduction, use Schedule A, Itemized Deductions. Job search
expenses are claimed as a miscellaneous itemized deduction and the total of all
miscellaneous deductions must be more than two percent of your adjusted gross
income.
For more information about job search expenses, see IRS Publication 529,
Miscellaneous Deductions. This publication is available on
www.irs.gov
or by calling 800-TAX-FORM (800-829-3676).
Links:
- Schedule A, Itemized Deductions (PDF)
- Publication 529, Miscellaneous Deductions (PDF)