Are Job Search Expenses Tax Deductible?

Searching for a job doesn't just cost time and effort; it also costs money. Thankfully, if they meet certain criteria, job search expenses are among the many tax breaks you can claim to lower your bill or increase your refund. The key to making the most of your deduction is keeping detailed records of your time and the money you spent trying to find a job.

Preparation Expenses

If you pay for a resume service, you can deduct those job search expenses from your income taxes. Make sure to keep receipts from everything. Printing out hard copies of your resume offers a bit of a tax deduction, as does the postage for sending paper copies to your prospective employers.

Travel Expenses Eligible for Deductions

Any job search expenses incurred traveling to and from a job interview count as a deduction. Eligible expenses include airfare, rail fare, mileage and parking. You can even deduct lodging for overnight stays. However, you can only take deductions related to job search expenses if you travel to another city, and there are limits to how much you can deduct. You can't deduct any entertainment while you're in town, either. If you go to the art museum, eat out at a restaurant or take in a live concert, those expenses aren't related to your job search. You can't write off the entire trip — only the portion of it related to your job search and job interview.

Limits for Certain People

You must also meet criteria based on the type of job. You can only deduct these expenses if you look for a position within your field. For example, if you're a software developer looking for a vaunted position at a Silicon Valley tech firm, you should be able to write off your expenses. However, if you completely change careers, the deduction can't happen. If you're a college grad seeking your first full-time gig, you can't write off the cost of your job search, either.

Math

The IRS limits the amount of job search expenses you can deduct from your return. The law states you may only deduct anything above 2 percent of your adjusted gross income. For instance, if you make $100,000 in a particular year, you can write off anything over $2,000 related to your job search. If you spend $2,500 that year, your deduction maxes out at $500.

To qualify for moving expenses, you have to move 50 miles or more away from your current commute. You must also work at least 39 weeks out of the previous 52-week period before the move.

Tracking Expenses

If you want to write off your job search expenses, you absolutely have to keep track of them. Write them down in a ledger, keep them saved on your computer, or download some handy apps to your smartphone. Because you have a chance of being audited, it's vital that you keep detailed records.

If you're starting to worry about the amount of money you've had to spend searching for a job, remember that you might see some tax breaks from your activity. Research what's tax deductible beforehand, and make sure you take note of every purchase to make things easier when it's time to file your income taxes.

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