If you’re looking for a new job, you may be able to deduct some of your job hunting expenses on your tax return.
· The deduction will be an itemized deduction on schedule A, to be combined with other miscellaneous expenses, deductible to the extent that the total exceeds 2% of your adjusted gross income.
· To qualify for a deduction, your job search must be in your current occupation. You cannot deduct expenses when searching for a job in a new occupation, if you’re looking for a job for the first time, or if there was a substantial break between your last job and the time you began looking for a new job.
· You can deduct amounts spent in preparing and mailing your resume to prospective employers.
· Travel expenses in looking for a new job may be deductible. The trip must be primarily for a new job. The amount of time spent in personal activities versus looking for a new job is important in determining the deductible amount of travel expenses.
· Any amounts paid to an employment or outplacement agency are deductible. However, if your employer pays you back for those fees in a later year, you then have to include that amount in income, up to the benefit you received from the deduction.
If you have questions about this deduction, call Kelly Phillips at Bell and Company at 501.753.9700.