Job Search Expenses Can Be Tax Deductible on Your Tax Return, Even if You Don't Get the Job
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Job Search Expenses Can Be Tax Deductible on Your Tax Return, Even if You Don't Get the Job

the IRS allows you to deduct certain job-related expenses on your federal income tax return regardless of whether you actually get the job

January 30, 2018

If you've been looking for a new job in the same line of work as your most recent job, you may be able to deduct some of your job search expenses on your federal income tax return. And it doesn't even matter if you got the job. But the Internal Revenue Service (IRS) does have some limitations. So if you've been looking for a new job, check into whether your situation qualifies you for a tax credit.

Expenses must meet a threshold

Like many tax deductions, the deduction for job search expenses must meet a minimum threshold in order to qualify. That amount is currently 2% of your adjusted gross income, which means that you can't deduct job search expenses under this amount. So that's more incentive to get a job!

the new job must be in the same line of work as the old job

The IRS doesn't allow a deduction to change careers, so if you're changing your line of work altogether you can't claim any of the expenses. If you are a teacher and want to start working as a firefighter, it doesn't qualify. But if you are an administrative assistant and are looking for another office-type job, you may qualify.

Have a resume? Deduct the related expenses.

If you do things the old fashioned way and have expenses related to preparing, printing or sending a resume, you may be able to deduct those expenses. That means you can claim the cost of the stamp, the paper, the envelope, etc. You may be able to claim fees related to professional resume preparation or review services.

Travel Expenses

You may be eligible to deduct travel expenses related to your job search, but looking for work must be the main purpose of the trip. You can't take a 10-day vacation, attend a brief interview, and deduct the cost of the trip, even though that would be nice. If you had to travel to another city for an interview and the majority of the trip was for this purpose, then you can deduct your expenses, which may include airfare, mileage, and lodging.

Job Placement Expenses

If you signed up with a placement agency or employment agency to find work, you can deduct these expenses. These agencies offer career counseling and help to match you with potential employers.

Reimbursed Costs Are not deductible

If you were reimbursed for any job search expenses, even by a previous employer, you can't claim those expenses as a deduction.

deducting first-time job search expenses

If you're looking for your first job, that's great. But you can't deduct any of the expenses related to the job search. Expenses are only deductible when you're looking for a new job in your current line of which, which doesn't apply if you haven't worked before.

deducting educational courses for a new job

You can't deduct educational expenses under the job search deduction regardless of whether it is for new skills or to improve skills in your current line of work. But don't worry. You can deduct certain costs like these under the education deduction.

time between jobs matters

If there was a substantial break between the start of your job search and your last job, you can't deduct the job search expenses. So if you left your last job twenty years ago to be a stay-at-home mom, you're out of luck. The IRS doesn't offer any specific time frame for what qualifies as substantial, however, so use your best judgment. If you take a year off work to care for a child, you probably don't qualify. But if you start looking for work shortly after leaving the old job, you may be able to claim it.

Credit Elimination

For the 2018 through 2025 tax years, most job search and career tax deductions were eliminated by the Tax Cuts and Jobs Act passed in December 2017. We do not know if this credit will be reinstated.