How to Write Off Job Search Expenses
Job search expenses aren’t one of the more common deductions, probably because of the specific rules about what can and can't be deducted.
- To qualify for a deduction, your expenses must be for a job search within your current occupation. Looking for a new line of work won’t qualify.
- You can deduct employment and placement agency fees while looking for a job in your present occupation. If your employer pays you back in a later year for employment agency fees, you’ll need to include the amount you received in your gross income, up to the amount of your tax benefit in the earlier year.
- You can deduct the costs of preparing and mailing copies of your résumé to prospective employers, as long as it’s for work in your present occupation.
- If you have to travel to look for a new job, you may be able to deduct your expenses to and from your destination. The trip must be primarily to seek employment within your existing occupation.
- You cannot deduct job search expenses if there was a substantial break between when your last job ended and when you started looking for a new one.
- You cannot deduct job search expenses if you’re looking for your first job.
- In order to be deductible, the amount that you spend for job search expense, combined with other various expenses, must exceed a certain threshold. Job search expenses are considered a miscellaneous itemized deduction. The amount of your miscellaneous deduction that exceeds 2 percent of your adjusted gross income (AGI) is what can be deductible.
When you do your taxes with 1040.com, enter job search expenses on our Job, Tax and Other Expenses screen, on line 23, Other Expenses. Our tax return interview will direct you to the screen.
Also see Deductions and Your First Job.