The mere fact that you have job search expenses does not make them deductible or will save you a great deal on your income taxes. Here is a good summary of the treatment of job search related expenses. Note that the savings are probably not as great as one may think.
Job Search Expenses May be Deductible
People often change their job in the summer. If you look for a job in the same line of work, you may be able to deduct some of your job search costs. Here are some key tax facts you should know about if you search for a new job:
- Same Occupation. Your expenses must be for a job search in your current line of work. You can't deduct expenses for a job search in a new occupation.
- Résumé Costs. You can deduct the cost of preparing and mailing your résumé.
- Travel Expenses. If you travel to look for a new job, you may be able to deduct the cost of the trip. To deduct the cost of the travel to and from the area, the trip must be mainly to look for a new job. You may still be able to deduct some costs if looking for a job is not the main purpose of the trip.
- Placement Agency. You can deduct some job placement agency fees you pay to look for a job.
- First Job. You can't deduct job search expenses if you're looking for a job for the first time.
- Substantial Job Break. You can't deduct job search expenses if there was a long break between the end of your last job and the time you began looking for a new one.
- Reimbursed Costs. Reimbursed expenses are not deductible.
- Schedule A. You usually deduct your job search expenses on Schedule A, Itemized Deductions. You'll claim them as a miscellaneous deduction. You can deduct the total miscellaneous deductions that are more than two percent of your adjusted gross income.
- Premium Tax Credit. If you receive advance payments of the premium tax credit it is important that you report changes in circumstances, such as changes in your income or eligibility for other coverage, to your Health Insurance Marketplace. Other changes that you should report include changes in your family size or address. Advance payments of the premium tax credit provide financial assistance to help you pay for the insurance you buy through the Health Insurance Marketplace. Reporting changes will help you get the proper type and amount of financial assistance so you can avoid getting too much or too little in advance.
Each and every taxpayer has a set of fundamental rights they should be aware of when dealing with the IRS. These are your Taxpayer Bill of Rights. Explore your rights and our obligations to protect them on IRS.gov.
Additional IRS Resources:
- Publication 463, Travel, Entertainment, Gift, and Car Expenses
- The "What Ifs" for Struggling Taxpayers
- Publication 4128, Tax Impact of Job Loss
- Publication 5152: Report changes to the Marketplace as they happen English | Spanish
IRS YouTube Videos:
- Job Search Expenses - English | Spanish | ASL
- What If - English | Spanish | ASL
- Premium Tax Credit - English | Spanish | ASL
- Premium Tax Credit: Changes in Circumstances - English | Spanish