Today we will take a look at deducting job search expenses. I selected this topic after having two clients last week indicate they were starting a new job search.
Here are seven things you need to know about deducting these costs:
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.
You can deduct employment and job placement agency fees you pay while looking for a job.
You can deduct the cost of preparing and mailing copies of your résumé to prospective employers.
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.
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.
You can’t deduct job search expenses if you’re looking for a job for the first time.
You usually will claim job search expenses as a miscellaneous itemized deduction. You can deduct only the amount of your total miscellaneous deductions that exceed two percent of your adjusted gross income.
Disclaimer: The items included in the Tax Tip Tuesday Video Blog are informational only and are not meant as tax advice. Consult with your tax advisor to determine how any item applies to your situation. IRS Circular 230 disclosure: To ensure compliance with requirements imposed by the IRS, we inform you that any U.S. federal tax advise contained in this communication (including any attachments) is not intended or written to be used, and cannot be used, for the purpose of (i) avoiding penalties under the Internal Revenue Code or (ii) promoting, marketing or recommending to another party any transaction or matter addressed herein.