If you are searching for a new job that is in the same line of work you currently have, you may be able to deduct some job-hunting expenses on your federal income tax return. Expenses are deductible even if you don’t get a new job.
Here are some important facts to know about deducting costs related to job searches:
- Expenses are tax deductible when the job search is in your current line of work.
- Costs associated in preparing and mailing a résumé are tax deductible.
- 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.
- Job placement or employment agency fees are deductible.
- If an employer or other party reimburses search-related expenses, like agency fees, they are not deductible.
- Job search expenses are only deductible as miscellaneous deductions on Form 1040, Schedule A.
However, the total miscellaneous deductions must exceed 2% of your adjusted gross income.
You can’t deduct these expenses if you are looking for a job in a new occupation, had a substantial break between the ending of your last job and looking for a new one, or are looking for a job for the first time.