Here are several factors related to Deducting your Job Seeking Costs:
1. To Qualify for a deduction, the expenses must be spent on a Job Search in your Current Occupation. Funds spent on obtaining a job in a Different type of Occupation do NOT Qualify in the same way.
2. You can deduct amounts spent for preparing and mailing your Resume to prospective employers. You can also deduct travel costs incurred for traveling to Job Interviews. As long as the primary purpose for the travel is for Seeking Employment, the costs can include hotel, car rental, and meal costs for the trip.
3. You can deduct Employment and Outplacement Agency fees you may pay while looking for New Employment. This must still be related to a job in your current occupation. If these fees are refunded at a later time, this refund amount will be included as Income at that time.
There are some Restrictions related to these Job Seeking Deductions.
1. The funds spent must be for a New Job in your Current Occupation. Costs for a different type of job do NOT Qualify as a deduction for Tax purposes.
2. You cannot deduct Job Search Expenses if this is for your very first job.
3. You can deduct Job Search Expenses for a reasonable period of time after your last job. The tax deduction ends when there has been a substantial break between the end of your last employment and the time you begin looking for a new job.
These Job Seeking Expenses are deductible on Schedule A Itemized Deduction as part of Miscellaneous Section. This section allows deduction for costs that exceed 2% of you Adjusted Gross Income.
Steven Z. Freeman, CPA provides IRS Tax Preparation Services and can assist you with any actual calculations on your Tax Returns. If you have any questions on this matter or to schedule a complimentary initial consultation, Please call us at (805) 495-4211.