Expenses You Can Deduct When Looking for a New Job - Tax Professionals Member Article By Tiffany Gaskin
Posted by Tiffany Gaskin

Expenses You Can Deduct When Looking for a New Job

Expenses You Can Deduct When Looking for a New Job

While the pandemic is gradually going away, the human population still feels the effect. As a result, many people are struggling to get another job. Everyone looking for a new job needs to keep track of their expenses during the search. You might be able to deduct some costs you incur when you job hunt.

When you search for a new job in a similar industry, you can deduct expenses such as resume preparation, phone calls, agency fee, counseling sessions you paid. When employed during your search, you can deduct costs that exceed 2% of your income.

 

Sample Deductive Expenses During Job Hunting

  • Agency Fee: the fees you pay to an employment firm while job hunting might be deductible. However, if your employer reimburses the expenses, this amount must be included as part of your gross income. As a result, if your employer paid the fee, one might not include the agency fee as part of the deduction. 

  • Resume Preparation: All the costs you incurred by printing, typing, and sending out your resume are deductible, provided you are looking for a new job in a similar field as your present job. If you hire someone to help with your resume, you can also deduct the cost. Charges for professional photographs and advert expenses are included as well. 

  • Phone Calls: Long-distance phone call bills to potential companies can be deducted. You need all your phone call records as proof during tax time. 

  • Travel Expenses: if you have to travel to a new place searching for a job in your field, one might qualify to deduct the travel expenses. Such expenses are mileage, airfare ticket, hotel, and meal.


Expenses for Moving 

There are cases your new job might take you out of town. In cases like this, some expenses might be tax-deductible. However, how far your new job is will determine how much you can deduct. Your new job needs to be more than 50 miles away from home, compared to the distance from your old house to your old office location. 

As an example, currently, my job is about 20 miles from my home. If I get a new job, I can only qualify for the tax deduction if my new job is at least 70 miles from my old house. 

The duration of working at your new job also determines your deduction of moving expenses. One needs to work in the new location for nothing less than 39 weeks in the year after your move. Someone self-employed needs to work at the new job for 78 weeks two years after the move. A few exceptions are available to a disability, transfers, layoffs, and other situations. 

One might even include transportation costs alongside whatever costs you incur for storing your household items for a month. Expenses involved in traveling and lodging from your old house to the new one can also be deducted.

 

Things you cannot deduct 

While some expenses can be deducted as long as you are looking for employment in your current job, there are situations where you will be disqualified from the deduction. A couple of examples are:

  • You want and you are looking for a job in a new industry or occupation

  • You don't have a job in a particular industry for an extended period for your new job to be considered a position in a new field. 

  • Your job search is for your first job.

  • There is a considerable gap between when your last job ended and when you started looking for a new job. 


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Tiffany Gaskin
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