How to Write Off Your Job Search

If you've been searching for a job for the past year, you may be able to deduct the costs associated with your job search from your taxes. The great news is that you don't have to be unemployed to take advantage of this tax break. However, certain rules govern exactly which job search tax deductions you are eligible for and the amount that can be subtracted from your tax liability.

The one guideline that rules all the others governing these tax deductions is that only expenses for job searches within your current occupational field can be deducted. For example, if you currently work as an accountant, you can only claim credit for the costs associated with looking for other accounting jobs. Money spent looking for a position in marketing would not be eligible for the tax credit.

The IRS provides information on its website about the types of items you can write off as a job search expense. These items include the following:

• Fees paid to a placement or an employment agency
• Resume preparation fees
• The cost of copies, envelopes, and postage, but only if you use these items to mail copies of your resume to potential employers
• The cost of distributing your resume electronically
• Travel expenses related to searching for jobs in other areas can be deducted if most of the time in the area is spent looking for employment

As noted, you can still claim this deduction even if you are looking for a job while employed. However, people who are unemployed can only deduct these job search expenses if the time between the end of their employment and the beginning of their employment searches was relatively short. If you were fired in November but didn't start looking for a new job for six months, you can't claim the tax credit. Neither can you deduct your job hunting expenses if you're looking for employment for the first time.

Lastly, the IRS limits the amount of money you can deduct for job search costs. Only the amount above 2% of your gross wages may be claimed on your taxes. If you earn $30,000 per year, for instance, you can deduct any amount over $600. This is why it's important to track the money you spend on your job search. Always get receipts and save them in a secure location. Use a spreadsheet to track and organize your expenses, and find an easy-to-use smartphone app to help you capture important financial information while you are traveling.

Job search tax deductions are one way to reduce your tax obligation. As long as you itemize your expenses and operate within the guidelines, you should be able to use this tax break to save money while hunting for a job.

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