Many Deductions for Job Seekers

In the recent whirlwind of economic
changes, many Americans are experiencing the biggest lifestyle
change they’ve ever faced: the loss of a job or career. If you’re
spending your summer months updating your resume or attending
career fairs in hopes of finding a job, you may be able to deduct
some of those expenses on your tax return.

Here are seven tips from the Internal Revenue Service about
deducting costs related to your job search:

1. To qualify for deduction, the expenses must be for a job search
   in your current occupation. You may not deduct expenses incurred
   looking for a job in a new occupation.
2. You can deduct employment and outplacement agency fees you pay
   while looking for a job in your present occupation. If our employer
   pays you back in a later year for employment agency fees, you must
   include the amount you receive in your gross income, up to the
   amount of your tax benefit in the earlier year.
3. You can deduct amounts you spend for preparing and mailing
   copies of your resume to prospective employers, as long as you are
   looking for a new job in your present occupation.
4. If you travel to an area to look for a new job in your present
   occupation, you may be able to deduct travel expenses to and from
   the area. You can only deduct the travel expenses if the trip is
   primarily to look for a new job. The amount of
   time you spend on personal activity compared to the amount of time
   you spend looking for work is important in determining whether the
   trip is primarily personal or is primarily to look for a new
   job.
5. You cannot deduct job search expenses if there was a
   substantial break between the end of your last job and the time you
   begin looking for a new one.
6. You cannot deduct job search expenses if you are looking for a
   job for the first time.
7. The amount of job search expenses that you can claim on your
   tax return is limited. You can claim the amount that is more than 2
   percent of your adjusted gross income. You figure your deduction on
   Schedule A.

For more information about job search expenses, see IRS Publication 529, Miscellaneous
Deductions. This publication is also available on www.irs.gov or by
calling 800-TAX-FORM (800-829-3676).