Are My Job-Seeking Expenses Deductible on My Income Tax?

by Herb Kirchhoff

    The federal tax code allows you to deduct certain expenses you incur in seeking a new job. In general, to be deductible, your job-hunting costs must be paid from your own pocket. If the costs are reimbursed by someone else, such as a state or local government job placement agency, you cannot deduct them.

    Deduction Qualifications

    You can claim a deduction for expenses you have in looking for a new job in your present occupational field, even if your search doesn’t produce a new job. But you can’t deduct the costs of seeking a job in a different occupation. If you are a recent graduate, you don’t get to deduct the costs of seeking your very first job. You also can’t deduct expenses of looking for a job after a “substantial break” between the end of your last job and your hunt for a new job. For example, someone reentering the work force after raising a family would be considered to have taken a "substantial break."

    Travel Expenses

    You can deduct your travel expenses in looking for a new job. If you travel out of town to look for a new job in your field, you can deduct the costs of traveling from your home to the area where you are seeking work, as well as the local travel costs of going to prospective employers. If you travel out of town for primarily personal reasons but take time during your personal visit to search for work, you can’t deduct the costs of travel from your home to the out-of-town destination. But you can deduct your expenses for local travel to meet with prospective employers during your visit.

    Other Search Expenses

    You can deduct the money you pay to an employment or outsourcing agency in looking for a new job in your present occupation. If your new employer pays the agency fees directly or reimburses you for agency fees you paid, you can’t deduct those costs. You can deduct the money you spend to prepare a resume of your experience in your current occupation, along with the costs of copying your resume and mailing it to prospective employers. You also can deduct costs of telephone calls to prospective employers and classified “position-wanted” ad placement fees. You may also be able to deduct expenses of going into business for yourself in your current occupation.

    Claiming Deduction

    You must itemize deductions in order to claim your job-hunting expenses. You take the deduction on Line 21 of Schedule A. Your job search expenses are a miscellaneous deduction that is subject to the 2 percent income exclusion. You add your job hunting expenses to your other miscellaneous deductions. You can deduct the portion of your total miscellaneous deductions that exceeds 2 percent of your adjusted gross income.

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    About the Author

    Herbert Kirchhoff has over 35 years experience as a newspaper and newsletter reporter, writer and editor, with 27 of those years spent on telecommunications industry policy issues. Kirchhoff has a B.A. in journalism from Rider University in New Jersey and has been published in the "Trenton (N.J.) Times" and in "Communications Daily" and State Telephone Regulation Report, Washington, D.C.

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