Job search expenses are miscellaneous itemized deductions. The miscellaneous expenses rules can be baffling. The basic one is that you can claim the amount of expenses that is more than 2% of your adjusted gross income, so be sure to save all your receipts from the reams of printer paper used to spit out your resume to train tickets and parking lot chits. Also, remember to keep track of your car mileage as you drive to and from appointments.Job-search expenses can be tax deductible only when searching for a new job in your current profession. That means if you're switching careers, they are off-limits; and first-time job seekers are excluded from any of the deductions. In addition, the IRS does not permit deductions after a substantial break between your last job and your current job.Here are some examples of deductible expenses:
- Agency Fees You can deduct employment and outplacement agency fees you pay while looking for a job. If your employer pays you back in a later year for employment agency fees, you must include the amount you received in your gross income, up to the amount of your tax benefit in the earlier year.
- Resume Preparation You can deduct amounts you spend for preparing and mailing copies of your resume to prospective employers. This includes paper, ink, printing costs, and postage.
- Travel If you travel to look for a new job, you may be able to deduct travel expenses to and from the area to which you traveled. This can include mileage, parking fees, taxi fares, airfare, and hotel room charges. You can deduct the travel expenses only if the trip is primarily to look for a new job.
- Dues & Membership Fees Dues, subscriptions, and professional association fees can be deducted.
- Professional Growth If you pay to take skill-building seminars and/or job-training courses, or to attend networking events, the charge is usually deductible, but you must be able to prove that it's connected to your job search.
- Childcare If you need to hire a babysitter to watch your kids while you're out on an interview, you can probably deduct his or her wages, but you need to be diligent about your record-keeping.
- Online Fees Work-related Wi-Fi charges, online job-site fees, and networking service fees such as LinkedIn's fee for an upgraded professional access are deductible.
If you get that job in a new city that is at least 50 miles away, you can look at moving expenses as another deduction!