Deduct The Costs Of Your Job Search

It’s hard to get a break when you’re out of work, but there are a few tax breaks you do qualify for. Did you know that you can deduct travel expenses for job interviews? The fees you pay to an outplacement firm? And the cost of printing your resume on ostrich ebony paper? A survey of 1,000 adults found that only 1% of them did. While you’re trying to snag a job, might as well catch a few tax breaks along the way.

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  1. Papa Bear says:

    This is only valid for those who itemize and what’s the point of itemizing if the standard deduction is going to be higher than the total itemized deductions. On the other hand, if you itemize or have had an expensive job hunt, go for it.

    • Loias supports harsher punishments against corporations says:

      That’s a good point. If you’re unemployed there’s a good chance your income isn’t that high anyway, so you’ll be getting a good portion of those taxes back simply from having overpaid taxes while employed.

      • wrjohnston91283 says:

        On top of having to itemize, job hunting expenses are a 2% “Misc. Deduction”. So if your AGI is made $40,000, you need to have total misc expenses of more than $800 to even begin to itemize.

        My guess is many people who are jobless aren’t itemizing to begin with.

        • RvLeshrac says:

          I always love the “YOU CAN DEDUCT THIS!” articles, since the majority of people who can deduct these things are rich enough that they never pay any meaningful taxes in the first place.

          • td45 says:

            never pay meaningful taxes? my mom (a physician) takes home several $100k and pays more than $100k in taxes…she probably pays more taxes than your salary. as a physician, she probably contributes more to society than you do too. so get off your high horse about “rich” people always being greedy.

            • Nigerian prince looking for business partner says:

              Wow, a (presumably) grown adult bragging about his mommy on the internet.

          • AnthonyC says:

            While there is a grain of truth to the “the rich don’t pay taxes” meme, stories of it’s magnitude have been greatly exaggerated.

            Anyone who is so rich (or, you know, retired and living on invested savings) that most of their income comes from capital gains will end up paying a relatively low percent of their income in taxes- currently 15% for long term capital gains. See, for example, Warren Buffet talking about how he pays a lower percentage than his secretary. But this category is (other than retirees) limited to a very small fraction of really, really wealthy people. It doesn’t apply to even very well-off people making, say $400k/year, who are in the 35% federal tax bracket, plus (say, in MA) 5% state income tax, plus property taxes (which can easily be another 5% of income if you live in a nice neighborhood). And of course they still pay (unfortunately regressive) sales and FICA taxes.

            Are there loopholes that should be closed? Yes. But it is disingenuous in the extreme to claim that most people making enough to itemize their deductions aren’t paying taxes.

  2. kingofmars says:

    Can you deduct the cost of a new business suit as a job hunting related expense?

    • wrjohnston91283 says:

      I don’t believe so, since its not a uniform. In general, you can only deduct clothing that you wouldn’t be able to wear outside of the job. So if I need to buy a bunch of mechanics outfits, I can deduct that, since I wouldn’t wear out outside of the job, but “office” clothing such as shirts, ties, suits isn’t something that’s dedicated only to the job.

  3. Consumeristing says:

    Do you have to be unemployed to use it?

  4. Clyde Barrow says:

    Weird,,the guy in the pic looks like John Belushi. =)

  5. BuyerOfGoods3 says:

    Itemizing isn’t worth the cost of possibly being audited years later for the receipts. Standard deduction all the way.

    • wrjohnston91283 says:

      I remember reading a few years back that many people were leaving hundreds of millions of dollars on the table by not taking deductions or credits that they could legitimately take because they were scared of the IRS. As long as you’re claiming a proper deduction, in most cases if you DO get audited, you’ll be requested to send documentation that you really did spend the money on the deduction.

  6. Tim says:

    This only applies if you’re looking for a job in the same industry as your last job. It also doesn’t apply if you’re applying for your first job. And you can only deduct expenses above 2% if your income.

    Small but important details!

  7. RvLeshrac says:

    Wait, people pay *fees* for job placement? Don’t those places get a *HUGE* cut off the top of your cheque in the first place?

    • RandomHookup says:

      Nope. A standard headhunter charges 15-35% of your pay to the employer, but separate from your pay. There are services out there that charge candidates for placements, though most of them disappeared in the ’90s.

  8. TheWraithL98 says:

    apparently all the people saying that itemizing is a bad idea don’t own a home. itemizing and deducting mortgage interest and school and property taxes work out to far higher than the standard deduction. And you get paperwork in the mail or online that you just plug figures in from. Itemizing doesn’t necessarily mean adding up receipts or doing any sort of oddball accounting which risks an audit. Sure you can do that, but if you’re a homeowner, you’d be foolish to not itemize at least the home specific stuff.

    • Nigerian prince looking for business partner says:

      It really depends where you live and how big your mortgage is. If you have a $100,000 mortgage and live in a low property tax county, it likely wouldn’t be enough to get above the standard deduction.

    • nealbscott says:

      I own a home. And this year will be the 2nd year that home ownership doesn’t help me towards itemizing … my mortgage is almost paid for. Ergo… my payments are more principal than interest. Besides my neighbor is a retiree home owner who paid his house off decades ago. Being a home owner doesn’t help him itemize either. Be careful your verbiage.

  9. sk1d says:

    But if I don’t have any income, what exactly am I deducting the expenses from?

  10. Jane_Gage says:

    If someone bumps into him with that sign he’s going to wind up a girl.

  11. yessongs says:

    It’s hard doing taxes when you have no income to report.