Deductible Job Hunting Expenses

Many people have lost jobs due to the economy and are out “beating the bushes” looking for work.  I’ve been asked whether or not some of the money they are spending can be deducted on this year’s taxes.   I’m not an accountant and one should check with her own tax preparer for guidance, but I’m happy to say that

 

 

some job-hunting expenses are deductible while others are not, according to the IRS.  To help determine deductibility, keep in mind the following general criteria:  (1) The expenses must be spent on a job search in your current occupation.  If you are trying to find work in a different field, the expenses probably are not deductible.  (2) If you are a first-time job seeker, e.g. just graduated from school, you are out of luck.  Expenses looking for a job for the first time are not deductible. (3) If you wait for a “substantial” time after losing your job before seeking another one, the job-search expenses will not be deductible.  What is a “substantial “ time?  It is determined on a case by case basis.  (4) Travel expenses to go to a new area job hunting will be deductible if the primary reason for the trip was the job search.  This is out of your home area, usually requiring an overnight stay.  If in doubt, you can always check with your local IRS office.