Many people don’t know they can write off expenses related to searching for a job, as its not a common deduction. That’s likely because there are specific rules regarding what is eligible for deduction and what isn’t.
First, expenses must be incurred while searching for a job within your current occupation. You can’t seek employment in a new industry and attempt to deduct the expenses.
You are able to deduct placement and employment agency fees as long as you’re seeking inside your current occupation. If you receive repayment of these fees later by an employer, you’ll have to include the reimbursement amount in your gross income, up to the amount you deducted earlier.
The costs of prepping and mailing copies of your resume to different employers within your current industry can also be deducted.
Looking for a new job may require travel. If you incur expenses to and from your destination while traveling to find work, as long as its within your current occupation, you can deduct the expenses.
You’re unable to deduct job search costs if there’s a significant period between your last job and the date you started looking for new employment.
You can’t deduct costs related to finding your very first job.
To be deductible, all job search expenses, combined with other costs, must exceed a specific limit, as job search expenses are categorized as a miscellaneous itemized deduction. These types of expenses must exceed 2% of your adjusted gross income (AGI) in order to be deducted.