Since it’s tax season a number of questions have come up regarding tax deductions for job seekers. It may be too late for those of you who haven’t filed for an extension for tax year 2013, but here are some tips to consider. If you are looking for a new job that is in your current industry and occupation, you may be able to deduct some of your job-search expenses on your federal income tax return:
Agency fees – You may deduct certain employment and outplacement agency fees you pay while looking for a job in your present occupation. But if your employer reimburses you for those fees, now or in the future, you must include the amount you received in your gross income, up to the amount of your tax benefit in the earlier year.
Resume preparation – You may deduct costs associated with the preparation of your new resume, but only if you are searching for a new job in your present occupation.
Travel – You may be able to deduct certain non-reimbursed expenses related to traveling to and from an interview if you are searching for a position within your current occupation
Limits: You are generally not allowed to deduct job search costs if there was a substantial break between the end of your last job and the time you began seeking a new job. Also, you cannot normally deduct job search costs if you are seeking a position for the first time in a particular industry and occupation.
Note that job search costs are considered miscellaneous itemized deductions, and for tax year 2013 it is only the amount of those miscellaneous deductions that exceed the threshold of 2% of your adjusted gross income that is deductible.
Of course, you’ll want to be sure to check with your tax professional or on the IRS website to ensure that these deductible expenses are allowable in any given tax year.