DEDUCTIONS WHEN LOOKING FOR A JOB

Larry, thanks for all the great information. My wife just got transferred to Arkansas so in order to stay with her I need to find a new job. Are there any deductions for job hunting?

Theodore

Theodore, thanks for the kind words. I hope that you are successful in finding a new job. Here is the information that you need on job hunting expenses.

1. In order to deduct job search costs, the expenses must be spent on a job search in your current occupation. You may not deduct expenses incurred while looking for a job in a new occupation.

2. You can deduct employment and outplacement agency fees you pay while looking for a job in your present occupation. If your employer pays you back in a later year for employment agency fees, you must include the amount you receive in your gross income up to the amount of your tax benefit in the earlier year.

3. You can deduct amounts you spend for preparing and mailing copies of a résumé to prospective employers as long as you are looking for a new job in your present occupation.

4. If you travel to an area to look for a new job in your present occupation, you may deduct travel expenses to and from the area. You can only deduct the travel expenses if the trip is primarily to look for a new job. The amount of time you spend on personal activity compared to the amount of time you spend looking for work is important in determining whether the trip is primarily personal or is primarily to look for a new job.

5. You cannot deduct job search expenses if there was a substantial break between the end of your last job and the time you begin looking for a new one.

6. You cannot deduct job search expenses if you are looking for a job for the first time.These expenses are only deductible if you itemize your deductions (long form).

You also need to keep in mind that the tax laws also allow a deduction for moving expenses. Let me know if you have any questions on moving expenses.

It is a pleasure serving you.

Larry Kopsa CPA