Traveling to job interviews. Dry-cleaning your best suit. Printing resumes on quality paper. Working with a job search coach. If you engaged in any job search activities in 2016, you may be able to deduct the related expenses from your taxes.
One of the most important things to note about job search tax deductions, is that they are only tax deductible if you’re looking for a new job in the same occupation. If your job search is an attempt to switch careers, your expenses are not deductible. For example, if you’re transitioning from a print journalist to a web journalist, your expenses may still be deductible. But if you’re making the leap from a zoologist to an accountant, probably not.
The other big barrier to job search tax deductions is whether or not this is your first time searching for a job. The IRS doesn’t allow first-time job seekers to deduct their job search expenses.
If you feel that your job search is keeping you within the same occupation, and this isn’t your first job search rodeo, here are several of the most common job search tax deductions you may qualify for:
- Resume expenses. Preparing and printing your resume is a tax-deductible activity. This includes paying for a resume writer, buying high-quality resume paper, and if you’re job searching by snail mail, mailing your resume.
- Job search assistance. If you’ve paid to work with a recruiter or placement agency, or used an online job search website that requires a subscription fee, those are tax-deductible job search expenses.
- Travel expenses. If you had to travel for job interviews, you may be able to deduct things like airfare, parking, meals, public transit tickets, hotel stays, and taxi rides even if you don’t secure the job.
- Becoming self-employed. If your job search activities revolve around moving to a self-employed or freelance status, where you’re in the same occupation but working on your own, you can deduct certain related expenses.
When CAN’T you take these expenses?
There are several circumstance where job seekers are not allowed to deduct related expenses. We covered two of them, but here is the comprehensive list:
- If you were reimbursed for any of these expenses (for example, if you purchased airfare for a long-distance job interview, but the company paid you back for the cost of your ticket).
- If you’re job searching for the very first time.
- If you’re changing careers.
- If there was a long break between your last job and your current efforts to find a new one (for example, if you took time off from work to raise children).
- If you don’t itemize deductions (Job search deductions are considered “miscellaneous” deductions and can only be taken if you itemize your deductions , along with other misc. deductions. But if you don’t itemize your deductions–that is, if you take the standard deduction–you can’t deduct any miscellaneous expenses.).
However, don’t worry about remembering all of this. TurboTax will ask you simple questions and gives you the tax deductions and credits you deserve based on your answers. You can even connect live via one-way video to a TurboTax expert and credentialed CPAs and enrolled agents to get your tax questions answered with TurboTax SmartLook™.