Are Job Search Expenses Tax Deductible?

The reasons for a job search may be varied but the costs are very real and often come at a time when you’re trying to minimize expenses. The good news is that that jobs search expenses may be tax deductible. Here are some things to know about which ones are and which ones aren’t.

  1. To be deductible, 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 résumé 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.
  5. You can’t 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 can’t deduct job search expenses if you’re looking for a job for the first time.
  7. You usually will claim job search expenses as a miscellaneous itemized deduction on Schedule A. You can deduct only the amount of your total miscellaneous deductions that exceed two percent of your adjusted gross income.

If you have questions about the above or want further clarification, see IRS Publication 529 or contact your tax attorney. And good luck in the job search!

By: Evan A. Nielsen (Licensed in California)

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