Are My Executive Job Search Expenses Tax Deductible?

by Meg Guiseppi on February 20, 2013

Executive Job Search Tax Deductions

Like you need another chore.

Your job search is already occupying all your days and thoughts.

But tax return time is right around the corner.

If you haven’t thought about your job search-related expenses, and kept good records of it all, you may be missing deductions you’re entitled to.

Here’s some information on what are and aren’t allowable deductions, so you’ll know which receipts and records to pull together.

According to IRS Publication 529 (2012), under Unreimbursed Employee Expenses, use the 2% limit (the amount of expense that is more than 2% of your adjusted gross income), for certain job search expenses in your present occupation, even if you do not get a new job.

Note that this does NOT apply if:

  • You’re looking for a job in a new occupation,
  • There was a substantial break between the ending of your last job and your looking for a new one, or
  • You are looking for a job for the first time. 

Employment and outplacement agency fees.

These are deductible unless the employer pays the agency. And, if your employer pays you back for the fees at a later year, you must include the amount you receive in your gross income up to the amount of your tax benefit in the earlier year.

Resume.

Resume preparation and mailing copies to prospective employers are deductible.

Travel and transportation.

You can deduct travel expense if your trip is primarily to look for a new job. If you travel to an area and, while there, you look for a new job, you may be able to deduct travel expenses to and from the area.

If you can’t deduct travel expenses to and from an area, you CAN deduct the expenses of looking for a new job while in the area.

You can use the standard mileage rate to figure car expense (55-1/2 cents per mile in 2012).

Disclaimer. Please note that I’m providing general information here. Don’t take my word for it. Consult with your CPA, financial advisor, and/or the various IRS publications before following any of this advice, and filing your tax return.

photo by Tax Credits 

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