Most job seekers will agree that looking for a job is a full-time job in itself. Fortunately, Uncle Sam is here to help when it comes to deducting some of the costs related to your job search. Here are some key tax deductions that IRS wants you to know:
Job Search in Current Occupation Field
To qualify for a tax deduction, the expenses must be spent on a job search in your current occupation. You may not deduct expenses incurred while looking for a job in a new occupation
Employment Agency Expenses
You can deduct employment and outplacement agency fees you pay while looking for a job in your present occupation. If your employer pays you back in a later year 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.
Resume Printing & Posting Expenses
You can deduct amounts you spend for preparing and mailing copies of your résumé to prospective employers as long as you are looking for a new job in your present occupation. Telephone calls and want-ad placement fees can also be deducted.
Job Search Travel Expenses
If you travel to an area to look for a new job in your present occupation, you may be able to deduct travel expenses to and from the area. You can only 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 looking for work is important in determining whether the trip is primarily personal or is primarily to look for a new job.
While you can get tax deductions listed above. It is important to know that you cannot get deductions for expenses in the following categories:
Job Seekers with Big Gap in Employment
You cannot deduct job search expenses if there was a substantial break between the end of your last job and the time you begin looking for a new one.
First Time Job Seekers
You cannot deduct job search expenses if you are looking for a job for the first time.
Disclaimer: The information in this article is from IRS Publication 529 on www.irs.gov. We recommend you contact the Internal Revenue Service or seek legal assistance for any clarifications on interpretation. The information in this article is not legal advice and is for guidance only.