If you’re looking for a job, make sure you track your expenses and mileage. Job search expenses are tax-deductible on your Itemized Deductions Schedule A. Here are the IRS Rules for deducting job search expenses:
- To qualify for a deduction, the expenses must be spent on a job search in
your current occupation. You may not deduct expenses you incur while looking for
a job in a new occupation.
- You can deduct employment and outplacement agency fees you pay while looking
for a job in your present occupation. If your employer pays you back in a later
year for employment agency fees, you must include the amount you receive in your
gross income, up to the amount of your tax benefit in the earlier year.
- You can deduct amounts you spend for preparing and mailing copies of your
résumé to prospective employers as long as you are looking for a new job in your
- If you travel to an area to look for a new job in your present occupation,
you may be able to deduct travel expenses to and from the area. You can only
deduct the travel expenses if the trip is primarily to look for a new job. The
amount of time you spend on personal activity compared to the amount of time you
spend looking for work is important in determining whether the trip is primarily
personal or is primarily to look for a new job.
- You cannot deduct job search expenses if there was a substantial break
between the end of your last job and the time you begin looking for a new one.
- You cannot deduct job search expenses if you are looking for a job for the
- The amount of job search expenses that you can claim on your tax return is
limited. You can claim the amount that is more than 2 percent of your adjusted
gross income. You figure your deduction on Schedule A.