Job Search Expenses

You can deduct certain expenses for looking for a new job in your present occupation, even if you do not get a new job.

Employment and outplacement agency fees. You can deduct employment and outplacement agency fees you pay in looking for a new job in your present occupation.

Résumé. You can deduct amounts you spend for amounts for preparing, typing, printing, and mailing copies of a résumé to prospective employers if you are looking for a new job in your present occupation.

Travel and transportation expenses.

• If you travel to an area specifically to look for work in your occupation or attend an interview you can generally deduct the ordinary and necessary travel costs.
• If you travel to an area and, while there, you look for a new job in your present occupation, you may be able to deduct travel expenses to and from the area.
• The purpose of the trip must be considered. You can 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 in looking for work is important in determining whether the trip is primarily personal or is primarily to look for a new job.
• Trips that are primarily personal are not deductible.
• Even if you cannot deduct the travel expenses to and from an area, you can deduct the expenses of looking for a new job in your present occupation while in the area.

Employer pays you back. If, in a later year, your employer pays you back 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.

Employer pays the employment agency. If your employer pays the fees directly to the employment agency and you are not responsible for them, you do not include them in your gross income.

You Must Itemize Deductions. Job hunting costs are a miscellaneous itemized deduction so you must file a Form 1040 and Schedule A (the long form) to claim them. They are also subject to a 2% Adjusted Gross Income limitation.

You cannot deduct these expenses if:

• You are looking for a job in a new occupation,
• There was a substantial break between the ending of your last job and your looking for a new one, or
• You are looking for a job for the first time.

For more information, refer to:

• Form 1040 Instructions, or
• Publication 17.