I lost my job in early November. I was wondering if I can deduct some of the expenses related to hunting for a new job. If so, which expenses might I be able to deduct, and on which tax form might I claim these deductions?
- P.C., Hamden, Conn.
The Internal Revenue Service says "you can deduct certain expenses you have in looking for a new job in your present occupation, even if you do not get a new job."
This would be classified as a "miscellaneous deduction," and reported on Line 22 of Schedule A-Itemized Deductions. As a miscellaneous deduction, job-hunting expenses - bundled with other such deductions - would be subject to the 2 percent rule, said Martin Nissenbaum, a certified public accountant with Ernst & Young LLP in New York.
Miscellaneous deductions that amount to less than 2 percent of your adjusted gross income (such as $1,400 on $70,000) would not count; deductions in excess of 2 percent, however, can reduce your taxable income.
What expenses qualify for this deduction? Resume typing, printing and mailing costs; travel expenses (including 37.5 cents a mile, if you drive to and from a job interview), and employment or outplacement agency fees also can be deducted.
You cannot deduct these expenses if you are looking for a job in a new occupation, or you are looking for your first job after leaving high school, college or trade school. There is one exception: "If, as a student, you had a summer job, then - after graduating - you found a job in a field related to your summer employment, those job hunting expenses could be deducted," Nissenbaum said.