Hunting for a new job can be an expensive endeavor, but did you know that some of the costs you’ve incurred during your search may be tax deductible?
Job search expenses can typically be claimed as a miscellaneous itemized deduction using Schedule A.
Read more: Top 5 tax refund myths debunked
Can you deduct job search expenses?
However, not everyone who spent money looking for a new job last year is going to be eligible for this tax break, according to a notice on the Internal Revenue Service's website.
Here are 6 things you need to know about deducting job search costs:
1. Same occupation: You can only deduct expenses for a job search within your current line of work, not a new occupation.
2. What’s potentially deductible?
- Travel expenses if the trip is mainly to look for a new job.
- Cost of preparing and mailing your resume.
- Some job placement agency fees you pay to look for a job.
3. New to the workforce? Sorry, you're not eligible if it's your first job.
4. Substantial job break: If there was a long gap between the end of your last job and the time you started looking for a new one, you don’t get the tax break.
5. Any reimbursed job search expenses are not deductible.
6. Your job search expenses, combined with other miscellaneous deductions, must exceed 2% of your adjusted gross income to be deductible.