Summer is often a time when people make major life decisions. Common events include buying a home, getting married or changing jobs. If you’re looking for a new job in your same line of work, you may be able to claim a tax deduction for some of your job hunting expenses.
Here are seven things the IRS wants you 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.
Additional IRS Resources:
- Publication 529, Miscellaneous Deductions
- The “What Ifs” for Struggling Taxpayers
- Publication 4128, Tax Impact of Job Loss
- Schedule A, Itemized Deductions
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