Did you know that you can deduct expenses incurred from job searching? However, the IRS has strict guidelines regarding what is eligible for deduction and what isn’t.
All job search expenses must be within your current industry. Looking for a new occupation or a new line of work will not qualify for deduction.
The following expenses are deductible as long as it is relevant to your present occupation:
- Resume fees: costs associated with preparing, printing, and mailing resumes to employers
- Employment agency fees: any money you pay to a third party to help you find a job in your current industry may be deductible. If you are reimbursed in a later year, you’ll have to add the reimbursement into your gross income, up to the amount you received in a tax benefit.
- Travel costs: expenses related to travel for the primary purpose of seeking employment.
You can’t deduct any costs you acquired if you’re searching for your initial job, or if you’ve experienced a large length of time between your last employment and the time you start looking for a new one.
Job search expenses must be greater than a set threshold in order to be deductible. To deduct expenses, you’ll have to claim them as an itemized miscellaneous deduction, and expenses must exceed 2% of your adjusted gross income in order to be eligible for deduction.