Job-Hunting Deductions

The Internal Revenue Code allow you to deduct expenses that you incur for searching for a job in your related field. Some of those expenses may be obvious; while other are not.

Some of the expenses are:

  1.  The cost of typing, printing and mailing your resume as well as long distance telephone calls are examples of these expenses. If you hire someone to prepare your resume or to help you to prepare your resume or to coach you in preparing a resume or on how to present yourself to an employer who may have special needs or requirements for his seasonal of part time position.
  2. Payments to an employment service can be deducted as well as job counseling and referrals.
  3. Travel expenses to get you to the job interview or for the initial trip to the job is deductible.  This may be air fare, rail fare or auto mileage at 56 cents-per-mile for the tax year. If you travel a significant amount you may find that you get a bigger deduction for your actual expenses. This can become a complex task to calculate the allowable deduction and it is best for you to seek professional help with this.
  4. The annual cost of a phone line or of a computer internet service generally will not be deductible unless you maintain a separate line or internet service just for business or job searching.  You must have a personal service.  The same is true for newspapers subscriptions.  If however you purchase a particular newspaper edition for a locale that you are seeking work in or if you subscribe to job search newsletters such as Workamper News, those being job related would be deductible.

These expenses cannot be taken, however, if you are searching for a job in a new field. If a school teacher is burned out with working with students and wants to change careers to work in a campground convenience store, that is a new field and the expenses would not be deductible. There are some exceptions, though.  If a school teacher were to work at a national park or museum as a guide that could be considered a teaching position. A secretary who leaves a 25 yr. position to work in the office of a campground could be considered working in an office clerk position. How the former and the subsequent work positions are described can be very important.

If you work as an employee, these job-search expenses are deducted as Sch A, Itemized Deductions.  They are subject to a 2% of your Adjusted Gross Income, AGI “haircut.”  If you should have a fairly high income, you will lose a good portion of your deductions. Also, if the standard deduction is higher that all of your itemized deductions, you are better off using the Standard Deduction and forgo the itemizing.  Thus you will not be able to deduct them after all.  It is best to add all of the deductions up to see how close you come to the standard deduction.