Tax Tip from the week of July 12, 2004

Deduct the cost of finding a new job

Are you looking for a new job? If you meet certain requirements, some of your job search expenses could be deductible, even if you don’t find a job.

First, you must be looking for a job in your current field of work. If you’re looking for a job in a new field, or a first-time job, your expenses won’t be deductible. Also, there can’t have been a substantial delay between the last time you worked and your new job search.

If you satisfy these requirements, you can deduct the cost of copying and mailing resumes and job applications. You can also deduct fees you pay to an employment agency for help in finding you a job, unless those fees are reimbursed by your new employer.

In some cases, you might even be able to include travel and transportation expenses. For example, you can deduct travel expenses if you travel to another area and spend most of your time looking for a new job. Your job search must be the primary reason for your trip, however. If you travel on vacation and spend just a few hours on your job search, your travel expenses are probably not deductible. You should still be able to deduct your local transportation costs while you’re actually looking for a job, though.

You claim job search expenses as a miscellaneous itemized deduction on Schedule A of your tax return. You can deduct only the portion of these and certain other deductions that exceed 2% of your adjusted gross income. Your total itemized deductions might also be limited, depending on your income level.

Contact our office if you have questions about job search expenses that might qualify.

Caution:  This is an archived copy of our Tax Tip of the Week.  Tax laws change often.  Do not rely on this information without discussing the implications with Mr. Huddleston.