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 Expenses – Travel 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.