job interview

Job Search Expenses Can be Tax Deductible

Taxpayers who are looking for a new job that is in the same line of work may be able to deduct some job-hunting expenses on their federal income tax return, even if they don’t get a new job.

Here are some important facts to know about deducting costs related to job searches:

  • Same Occupation – Expenses are tax deductible when the job search is in a taxpayer’s current line of work.
  • Resume Costs – Costs associated in preparing and mailing a resume are tax deductible.
  • Travel ExpensesTravel costs to look for a new job are deductible. Expenses including transportation, meals and lodging are deductible if the trip is mainly to look for a new job. Some costs are still deductible even if looking for a job is not the main purpose of the trip.
  • Placement Agency – Job placement or employment agency fees are deductible.
  • Reimbursed Costs – If an employer or other party reimburses search related expenses, like agency fees, they are not deductible.

Report job search expenses on Schedule A of a 1040 tax return and claim them as miscellaneous deductions. The total miscellaneous deductions cannot be more than two percent of adjusted gross income.

Taxpayers can’t deduct these expenses if they:

  1. Are looking for a job in a new occupation,
  2. Had a substantial break between the ending of their last job and looking for a new one, or
  3. Are looking for a job for the first time.

For more on job hunting, refer to Publication 529, Miscellaneous Deductions.

 

Gregory J. Cook, EA, CPA

Gregory J. Cook, EA, CPA

News from Cook & Co. Tax Advisors at 124 South Main Street in Arab, Alabama.
Gregory J. Cook, EA, CPA