Tax Law Blog: Deducting Job Search Expenses

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If you find yourself looking for work this summer, keep in mind you may be able to deduct your job hunting expenses. In its series of Summer Tax Tips, the IRS has provided guidance on deducting job search expenses. To qualify for deduction, your job search must be for a new job in your present occupation or profession. Job search expenses are not deductible if:

  1. You are looking for a new job in a new occupation;
  2. There was a substantial break between the ending of your last job and the beginning of your search for a new one; or
  3. You are looking for a job for the first time

You can deduct amounts you spend on preparing and mailing résumés to prospective employers. You can also deduct employment and outplacement agency fees you incur in looking for a new job. If you travel in search of a job, you may be able to deduct travel expenses if the trip is primarily for job hunting. You can elect to use the standard mileage rate to calculate car expenses, which is 56.5 cents per mile for 2013. Even if travel expenses are not deductible because the trip is primarily for personal activity, you can still deduct any job search expenses you incur while you are in the area.

For any otherwise deductible job search expense, if your employer or any other party reimburses you for an expense, you may not deduct it.

Job search expenses are considered miscellaneous itemized deductions. Deductible job search expenses are first combined with all other miscellaneous itemized deductions, and then you may deduct the amount exceeding two percent of your adjusted gross income.

Mitch Maahs, summer associate at the Davis Brown Law Firm and law student at the University of Iowa College of Law, Class of 2014.