Deducting Job Search Expenses

In the modern-day economy, many people are searching for jobs. Some expenses related to looking for a job may be tax-deductible. Here are some of the rules relating to the deduction for job search expenses:

  • The expenses must be incurred while looking for a job in your current occupation.  If you look for a job in a different field, the job search expenses are not deductible.
  • You cannot deduct job search expenses if there was a substantial break between your last job and the time you start looking for a new job
  • Fees paid to employment agencies are deductible, as are costs associated with making copies of your resume and mailing your resume
  • Travel expenses associated with looking for a new job may be deductible, as long as you can prove that the travel was primarily for the purpose of looking for a new job (you also have to carefully document the costs and mileage)

Job search expenses are miscellaneous itemized deductions subject to the 2% of Adjusted Gross Income rule.  This means that you will only be able to take the deduction if a) you itemize deductions, and b) your total miscellaneous deductions (job search expenses, tax preparation fees, etc.) exceed 2% of your AGI.