Job Seeking Tax Deductions: Which Expenses are Tax-Deductible?

August 9, 2011 | By: Charles P. Corsello, EA

Tax-Deductible Job Search ExpensesIf you are currently looking for a new job in the same field or industry in which you are currently or were recently employed, some of your job search expenses may be tax-deductible.

Additionally, if you need to relocate for a new job, promotion or other work-related reason, your moving expenses may be tax-deductible.

Here’s a look at those and other potential job search-related tax deductions that you may be eligible for that fall under the category of miscellaneous itemized tax deductions:

Job Search Expenses

If you are on the hunt for a new job, some of your expenses may be tax-deductible, such as:

  • The cost of preparing and mailing out resumes.
  • The cost of travel associated with job searching, as long as the travel claimed is done primarily for job seeking. This can include airfare, mileage, meals, lodging, etc.
  • If you are working with an employment agency, the cost of any required fees are tax-deductible unless of course, your employer pays you back. If they pay you back later, then that income must be included in your gross income up to the tax savings you had in the previous year.

If you are planning to claim any of the above deductions, you will need to keep in mind the following:

  • You can only claim the deduction if you are looking in the same field or industry in which you are currently or were recently employed.
  • You cannot claim any deductions related to looking for your very first job.
  • If there has been a substantial period of time since you were last employed, you will not be able to claim any of these deductions.
  • In order to claim these deductions, you must itemize your expenses.
  • You may only claim these deductions if the total of all miscellaneous itemized tax deductions is greater than 2% of your total gross adjusted income for the tax year. To calculate the deduction, subtract 2% of your AGI form the total of these expenses.

Moving Expenses

If you have to relocate for a new job, you may be able to deduct certain moving expenses on your tax return. Here is what you need to know:

  • In order to deduct moving expenses, you must relocate a minimum number of miles away from your current residence. The total number of miles you will need to move in order to qualify for the deduction is dependent upon the length of your current work commute. You must be moving more than 50 miles away from your current residence plus the number of miles that you commute to work currently. So if you commute to work 10 miles each day, you must move a minimum of 60 miles from your current home in order for these moving expenses to be tax-deductible.
  • Your moving expenses are not tax-deductible if your new or current employer is paying for your move.
  • Moving expenses that may be tax-deductible include the costs of packing materials, hiring a moving company, renting a moving truck, mileage, any necessary lodging, meals purchased during the move, and more.