Job Search Deductions for the Unemployed

Job search expenses can be deducted as miscellaneous itemized tax deductions if you look for a job in the same field at the same level as the one you left. The job search expenses are deductible even if you don't get the job. You can deduct job-seeking expenses as long as the amount of all miscellaneous itemized tax deductions is more than 2% of your adjusted gross income (AGI).

To figure your tax deduction, subtract 2% of your AGI from the total amount of these expenses.

Job search expense deductions are also subject to the overall limitation on itemized deductions based on income threshold amounts.

Allowable Job Search Tax Deductions

You may be eligible for the following deductions while you're searching for a job.

Employment agency fees: If in a later year your new employer repays your agency fees, you must include the amount in your income up to the amount of the deduction you claimed earlier. If your employer pays fees directly to the agency, you don't have to include them in your income.

Resume preparation: typing and printing, postage, long-distance charges, advertising, and photographs required for your resume.

Travel: airfare, mileage (some automobile expenses have been approved), meals (based on either actual expenses or standard federal per diem rates) and lodging (actual expenses only).

Qualifications: To qualify, your job search must be for a job in your current, or most recent, trade or business and should be at a similar level of responsibility with duties similar to those of your most recent job.

If you haven't held a job in that trade or business for an extended length of time, your job search will be considered for a new trade or business, and your deductions may not be allowed.

If you held a college internship or valid job while in college and your search is for a job in the same trade or business, you will be able to deduct job search expenses.

If you're just out of school and had no paying jobs while in school that were related to your trade or business, your deductions won't be allowed.