IT Employment

Job search expenses that are tax deductible

There may be a ray of sunshine in job search drudgery: tax deductible expenses.

Wouldn't it be nice if there was a side benefit to the soul-sucking drudgery of looking for a job? There just might be in the form of tax deductions (only if the job search exceeds 2 percent of your adjusted gross income). According to IRS Publication 529, deductible job search expenses generally fall into three categories:

Employee agency and outplacement fees: This expense is generally deductible. However, if you're reimbursed by an employer, you cannot deduct these fees. Resume preparation: If you engaged a professional resume service (or bought a professional resume app), the costs can be claimed. Peripheral expenses: Paper, envelopes, portfolios, postage, phone calls, etc. You'll have to keep receipts and be meticulous about keeping track of these. Travel and Transportation Expenses: If you have to fly across the country for an interview and the prospective employer is too cheap to pay for it, you can deduct that expense. You may even be able to deduct fuel and mileage figures but you have to be scrupulous in separating those from personal errands, etc.

Most important caveats

Here are some points to keep in mind when you're looking at job-search related deductions.

  • You have to be looking for a job in the same field you've worked in. For some reason, career changers don't get a break from the IRS.
  • The job you're looking for can't be your first job. The deductions only apply to transitional job searches.
  • There can't be a substantial break between jobs. If you're out of the workforce for several years, then decide to look for a job, you won't find many breaks from the IRS.

In short, consult a tax expert if you have any questions about how these deductions work.

About

Toni Bowers is Managing Editor of TechRepublic and is the award-winning blogger of the Career Management blog. She has edited newsletters, books, and web sites pertaining to software, IT career, and IT management issues.

3 comments
b4d93r
b4d93r

This was a really good article. Although i do have a question about other things like training. For example, say your company doesn't have the budget to send you to training, if you take some training and pay for it yourself and it relates to your job, is that tax deductable? What about events like a convention? If the convention directly relates to what you do, can that be taken off as well?

onetotreasure
onetotreasure

Training that re-inforces job skills to keep you current or better able to perform your current job function is deductible. same thing for conventions as long as it directly relates to what you do and can benefit your employer. If the training or convention is designed to prepare you for a promotion or another job even if within the same field or it helps you to merely meet minimum job skills, it would not be deductible.

toni.bowers
toni.bowers

I would consult a tax specialist about those questions.

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