Q&A With Bill: Are My Job Search Expenses Deductible?

William D. Truax, EA

William D. Truax, EA

People often change their job in the summer. If you look for a job in the same line of work, you may be able to deduct some of your job search costs.

Job hunting expenses are categorized as a “miscellaneous deduction” and should be reported on Schedule A (Itemized Deductions) of Form 1040. This means you’ll need to itemize your deductions in order to deduct your job search expenses. It also means you can only benefit from this deduction if the sum of your miscellaneous deductions exceeds 2% of your Adjusted Gross Income (AGI).

 

What Kind of Job Hunting Expenses Can I Deduct?

  • Same Occupation.  Your expenses must be for a job search in your current line of work. You can’t deduct expenses for a job search in a new occupation.

  • Resume Costs.  You can deduct the cost of preparing and mailing your résumé.

  • Travel Expenses.  If you travel to look for a new job, you may be able to deduct the cost of the trip. To deduct the cost of the travel to and from the area, the trip must be mainly to look for a new job. You may still be able to deduct some costs if looking for a job is not the main purpose of the trip.

  • Placement Agency. You can deduct some job placement agency fees you pay to look for a job.

  • First Job.  You can’t deduct job search expenses if you’re looking for a job for the first time.

  • Substantial Job Break.  You can’t deduct job search expenses if there was a long break between the end of your last job and the time you began looking for a new one.

  • Reimbursed Costs.  Reimbursed expenses are not deductible.

  • Premium Tax Credit.  If you receive advance payments of the premium tax credit it is important that you report changes in circumstances, such as changes in your income or eligibility for other coverage, to your Health Insurance.

  • Marketplace. Other changes that you should report include changes in your family size or address.  Advance payments of the premium tax credit provide financial assistance to help you pay for the insurance you buy through the Health Insurance Marketplace. Reporting changes will help you get the proper type and amount of financial assistance so you can avoid getting too much or too little in advance.

For more on job hunting refer to Publication 529, Miscellaneous Deductions. However, if you have questions about deducting job search expenses or need assistance, please CONTACT US right away. We’re here to help!