Job hunting? Deduct related expenses on your return

If you went looking for a new job last year, take some sting off that search by saving money with these write-offs.

By MSN Money staff Feb 24, 2014 3:55PM

Man reading job listings © Tetra Images, Getty ImagesBy Kay Bell, Bankrate


Bankrate on MSN MoneyThese days, a lot of Americans find themselves pounding the pavement in a quest for a new job, whether they've gotten the pink slip or expect to get one soon.


The good news: The search may help you cut your tax bill because under certain circumstances, job-hunting expenses are tax deductible.


New job, same field
First, your hunt for new work must be in the same field in which you're currently or were formerly employed. Uncle Sam won't help out if you decide to totally switch career gears.


Second, you can't decide to chill out for a while and then expect the Internal Revenue Service to help when you decide it's time to get back on the career track. Deductions aren't allowed for employment-search costs when there is a "substantial break" between your last job and when you begin looking for a new one.


Finally, recent graduates are out of luck. The costs you incur in getting your first job aren't deductible, because the tax law only allows you to write off expenses incurred in searching for another position in your present occupation.


But if you're on the lookout for a new position, start saving those job-search receipts.


What you can write off:

  • Employment and outplacement agency fees
  • Resume services
  • Printing and mailing costs of search letters
  • Want-ad placement fees
  • Telephone calls
  • Travel expenses, including out-of-town job-hunting trips

Even self-employment efforts could count at tax-filing time. The costs associated with investigating or attempting to start your own business, as long as it's in the same field as your current profession, may be tax-deductible.


Itemizing limits
Careful tracking of these expenses is critical because they are classified as miscellaneous itemized deductions. You itemize them on line 21 of Schedule A.


But you can't automatically subtract your job-hunting costs from your income -- just those that, when added to all your miscellaneous deductions, come to more than 2 percent of your adjusted gross income.


So hang on to those job-hunt vouchers. They can help push that miscellaneous amount to the allowable level, even if you don't get new work.


More from Bankrate

VIDEO ON MSN MONEY

10Comments
Mar 2, 2014 10:16AM
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If one doesn't have a job then how does one have itemized deductions?
Feb 26, 2014 4:21PM
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Deducting this on line 21 of Schedule A only helps your taxes if the cost is above 2% of AGI.

Mar 2, 2014 3:48PM
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IRS needs to enter the 21st Century and include technology based job search costs - who even mails resumes today??  Ugh.
Mar 2, 2014 3:51PM
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90 million Obamaville citizens have disappeared from employment data.  No longer working, no longer looking, well past the 99 weeks of Obama Dollars that they were receiving....using what little hope and pocket change they have to pay for their statistically unemployed brothers.  And so it goes.  mmm, mmm, mmm.

Mar 3, 2014 12:22AM
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"...another position in your present occupation."?  So your profession goes down the toilet (as the high tech industry did back around 2000, NObody is hiring, but one cannot deduct expenses for looking elsewhere?  Those that make the tax laws are buffoons.
Mar 2, 2014 9:39PM
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I'm writing this in the money section because I suppose they don't want comments in the entertainment section. Well, does anyone really care about the oscars? I hope not many. Another big deal about nothing: same old tired faces and personalities. It's not enough that they are paid millions and live like kings for "acting" like a human being, but then they want to be praised in public at these ridiculous affairs and awarded for their "hard" work. I'd say it's without a doubt one of the easiest jobs on earth. That's why kids, models, comedians, singers, athletes, children of other actors (nepotism), just about anyone can do it, and win the oscar. Most of the time they are chosen because they are either cute or pretty or know someone in the industry. They show up in limos, all dressed up and walk out on a red carpet behaving as some sort of superhero. It really is a sickening display of narcissism. Does anyone believe that if all the actors disappeared tomorrow that the show couldn't go on and maybe even better? And that goes for the politicians and CEOs too. Please feel free to read this at the ceremony if you are presenting.
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