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When you’re out of work, any help you can get with expenses is more than welcome. Sometimes these gifts come from unexpected sources, such as the Internal Revenue Service. The IRS provides tax deductions for job-hunting expenses that reduce your taxable income and decrease your tax bill. As an added bonus, you can claim them even if you didn’t land a job that tax year. (See also:16 Great Tax Deductions YouMay Have Overlooked)
However, there are a few caveats:
- Your job hunting expenses must add up to at least 2% of your total gross income to qualify as deductions.
- You must be looking for work in the same field. Unfortunately, career changers aren’t able to benefit from the government’s generosity.
- People looking for their first job are out of luck, too. You can only deduct job search expenses if you’ve already been employed, even if it was part-time.
- The IRS doesn’t recognize job hunting expenses you incur after a “substantial break” between losing your job and starting your search. While the agency doesn’t provide a specific definition for “substantial break,” waiting months to start your search may be a mistake.
- Most of these deductions allow you to write off the costs in full, but some do have limits. Check with a tax professional if you’re unsure.
The sum of these expenses is listed as a single itemized deduction on line 21 of Schedule A. You won’t have to send in any receipts or other documentation with your return, but make sure you have them just in case the IRS initiates an audit. Without comprehensive records, the IRS may disallow them and make you pay any additional tax you owe.
1. Employment Services
Using employment services can give you a boost in your job search, but the costs can get steep. Luckily, job seekers can deduct the fees associated with employment counseling, headhunters, or other job placement services. You can also deduct the costs of placing job-seeking ads in newspapers or on classified websites. Fees you pay for access or membership to job ad websites are similarly deductible.
2. Resume Preparation
Your resume is the first impression potential employers have of you, and sometimes you need to shell out a good bit of money to get it just right. You can deduct expenses you incur from professional resume preparation services, as well as books that provide resume-related advice and instruction. You can also write off printing and copying costs such as ink and paper, mailing when you send your resume to employers.
3. Communication
Local and long-distance phone calls you make via land line or cell phone to inquire about work or for job interview purposes are deductible. Keep in mind that unless you use the phone service solely for job-hunting purposes, you cannot deduct your entire phone bill. Only the portion of the charges that directly relate to your employment search are eligible. Request itemized bills so you can see exactly when you made the calls, how long they lasted, and how much they cost.
4. Networking and Professional Development
The fees you pay to attend job fairs, seminars, conferences, and other networking events while looking for work are also deductible. You can even write off fees for online networking sites and premium employment services such as those offered by LinkedIn. If you take any classes or training courses to build your skills and make yourself more marketable to employers, you can write off those expenses as well.
5. Travel
Travel expenses can be a little tricky, but if you don’t mind a little math, you should be able to write off a good portion of your costs. The IRS gives job hunters a $0.55 deduction per mile that covers both local and out-of-town driving to job interviews, networking events, and other job-related trips. You can also write off parking fees. If you use mass transportation or travel via air or rail, you can deduct the costs in full. Hotel or other lodging costs are deductible as well. And if you grab a bite to eat while you’re hitting the pavement, whether it’s a fast food breakfast in your car or a lunch interview at a fancy restaurant, you can write off 50%of each meal.
6. Childcare
While this last one isn’t actually a deduction, it’s still a huge help for many job seekers. The child and dependent care credit covers up to 35% of your day care or babysitting costs dollar-for-dollar, directly reducing the amount of tax you owe instead of reducing your taxable income. You can only claim expenses that you incurred while looking for a job and you must have the provider’s Social Security or Employer Identification number to qualify.
FAQs
In order to claim your job hunting expenses on your tax return, you'll need to itemize your deductions. That means you'll need to complete Schedule A and attach the form when you're ready to file your taxes. Job hunting expenses fall under the category of miscellaneous expenses.
What is the most overlooked tax deduction? ›
Out-of-Pocket Charity: It's not just cash donations that are deductible. If you donate goods or use your personal car for charitable work, these are potential tax deductions. Just be sure to get a receipt for any amount over $250.
What are some examples of deductions you might have to pay? ›
Deductions subtracted from your gross income to calculate your adjusted gross income are known as “Above-the-line” deductions.
- Retirement contributions and Traditional IRA deductions. ...
- Student loan interest deduction. ...
- Self-employment expenses. ...
- Home office tax deductions. ...
- HSA contributions. ...
- Alimony paid. ...
- Educator expenses.
What deductions were eliminated from the Tax Cuts and Jobs Act? ›
The Tax Cuts and Jobs Act eliminated or limited many deductions, credits, and limits, including the standard deduction, until Dec. 31, 2025. Personal and dependent exemptions are now obsolete, although the Child Tax Credit remains.
What qualifies as job expenses for taxes? ›
You can deduct only unreimbursed employee expenses that are paid or incurred during your tax year, for carrying on your trade or business of being an employee, and ordinary and necessary. An expense is ordinary if it is common and accepted in your trade, business, or profession.
What deductions can I claim? ›
You can deduct these expenses whether you take the standard deduction or itemize:
- Alimony payments.
- Business use of your car.
- Business use of your home.
- Money you put in an IRA.
- Money you put in health savings accounts.
- Penalties on early withdrawals from savings.
- Student loan interest.
- Teacher expenses.
What are 3 allowable deductions when filing taxes? ›
Common itemized deductions
Deduction | CA allowable amount |
---|
Medical and dental expenses | Expenses that exceed 7.5% of your federal AGI |
Home mortgage interest | On home purchases up to $1,000,000 |
Job Expenses and Certain Miscellaneous Itemized Deductions | Expenses that exceed 2% of your federal AGI |
3 more rowsDec 22, 2023
What deduction can I claim without receipts? ›
What does the IRS allow you to deduct (or “write off”) without receipts?
- Self-employment taxes. ...
- Home office expenses. ...
- Self-employed health insurance premiums. ...
- Self-employed retirement plan contributions. ...
- Vehicle expenses. ...
- Cell phone expenses.
How to get a $10,000 tax refund? ›
How do I get a 10,000 tax refund? You could end up with a $10,000 tax refund if you've paid significantly more tax payments than you owe at the end of the year.
Can I write off my car payment? ›
Only those who are self-employed or own a business and use a vehicle for business purposes may claim a tax deduction for car loan interest. If you are an employee of someone else's business, you cannot claim this deduction.
Requirements to receive up to $7,000 for the Earned Income Tax Credit refund (EITC)
- Have worked and earned income under $63,398.
- Have investment income below $11,000 in the tax year 2023.
- Have a valid Social Security number by the due date of your 2023 return (including extensions)
What are 3 examples of expenses that can be used as itemized deductions? ›
Types of itemized deductions
Mortgage interest you pay on up to two homes. Your state and local income or sales taxes. Property taxes. Medical and dental expenses that exceed 7.5% of your adjusted gross income.
What are three itemized deductions I could claim now or in the near future? ›
Itemized deductions are expenses the taxpayer incurred, such as mortgage interest, state or local income taxes, property taxes, medical or dental expenses, or charitable donations.
What does the standard deduction cover? ›
The standard deduction is a specific dollar amount that reduces the amount of taxable income. The standard deduction consists of the sum of the basic standard deduction and any additional standard deduction amounts for age and/or blindness. In general, the IRS adjusts the standard deduction each year for inflation.
Are itemized deductions limited? ›
Overall limit
As an individual, your deduction of state and local income, general sales, and property taxes is limited to a combined total deduction of $10,000 ($5,000 if married filing separately). You may be subject to a limit on some of your other itemized deductions also.
Can you deduct recruiting expenses? ›
With proper accounting, your business can deduct almost all recruiting-related marketing expenses at the end of the year.
Are job related expenses still deductible? ›
Expenses such as union dues, work-related business travel, or professional organization dues are no longer deductible, even if the employee can itemize deductions. Self-employed taxpayers may continue to deduct ordinary and necessary business expenses against self-employment income on Schedule C or Schedule F.
Can you write-off hunting? ›
You could deduct the purchase of the guns, but you would have to allocate the cost according to the percentage business use and personal use. For example, if buy a hunting rifle and use it 60% for business and 40% for hunting, then you could deduct 60% of the cost.
Can I write-off house hunting expenses? ›
You cannot deduct: Additional vehicle expenses, such as general repairs, maintenance, insurance, or depreciation. House-hunting trip expenses, or any other travel that exceeds one trip per member of your household. Costs of settling into your new home, including car tags, dog licenses, driver's license, or club fees.