Job Hunting and the IRS

Job Hunting and the IRS By Stephen J. Ganns{3:18 minutes to read}  

If you’re looking for a job, surprisingly, some of the expenses may be deductible. The IRS allows a deduction for searching for a new job, however, as always, there are some restrictions.

Some of the costs or expenses you can deduct are:

  • Resume – all costs involved in preparing, printing and mailing resumes
  • Travel –  to look for jobs in another city; also includes local travel, subways or metros, taxis
  • Overnight stay expenses for interview purposes
  • Placement agency fees. 

Remember that in order to deduct the cost of travel, whether overnight or not, the trip must be mainly to look for a new job. If you are away on a trip or vacation and happen to look for a new job, some of the local travel within that trip may be deductible, but the cost of flying or traveling to that destination would not be deductible.

First Job or Different Occupation

Unfortunately if you are graduating from school, and this is your first job, you cannot deduct job search expenses. For the same reason, you cannot deduct job search expenses if you are seeking work in a different occupation.  For example, you have been working at Target to pay your way through college, and now you’re going for a career in nursing.  Unless you were a nurse in Target, it’s not the same occupation and therefore you cannot deduct the job search expenses.

The IRS says 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. They have never clearly defined what that means so I don’t know how much that really applies.  In an examination by the IRS, you would most likely win as long as you had justifiable costs.

Finally, if any of these costs are reimbursed by your new employer, they are not deductible.

Job search costs are reported on Schedule A as a miscellaneous deduction, along with other types of miscellaneous deductions. The deductions must total more than 2% of your adjusted gross income.

As always, if you have any questions concerning this, please consult with your tax preparer or email or call us at info@gannscpa.com or 914-682-7007.

Good luck with your job hunt and remember – – the IRS has got your back, at least a little bit.

Stephen J. Ganns

Stephen J. Ganns, CPA
914-682-7007
steve@gannscpa.com
www.www.stephenjgannscpa.com

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