Job Hunting Expenses

Job Hunting Expenses and Your Taxes

With the jobless rate close to 6.5% nationwide, many individuals are seeking new employment. Taxes may not take precedence at the time, but job hunters should take into consideration whether or not job-hunting expenses are deductible, and what expenses qualify for deductions.

Questions To Ask Yourself:

Is the job in my current field? If you are seeking a job that falls in your current line of work, then expenses may be claimed as miscellaneous itemized deductions. However, if you are seeking employment in a new field (with no prior experience), there is no deduction for expenses.

Was there a time lapse in my employment? If there is a substantial break between your previous job and the time you begin to look for a new job, then you may not qualify for expense deductions.

What if I am working for the first time? If this is the first time you are looking for a job, then you will not qualify for expense deductions.

Some Typical Deductions:

  • Resume: Costs for preparation and mailing
  • Outsourcing Agency Fees: An individual can deduct employment and outplacement agency fees the pay in looking for a new job at their present occupation.
  • Fee Reimbursement: If a year later your employer reimburses you for employment agency fees, you must include the amount received in your gross income up to the amount of tax benefit in the earlier year.
  • Employer Pays Agency Fees: If the employer pays the fees directly to the employment agency and the individual is not responsible for them, then they are not included in gross income.
  • Travel/Transportation: Out of pocket expenses, such as travel, meals and lodging, for traveling to an area and searching for employment within your present occupation field may be a deduction. The ratio of time spent looking for a job vs. personal activities is important in calculating whether or not the trips primary purpose is that of job-hunting. As far as transportation, the standard mileage rate can be used to calculate expense. The 2014 rate for business use of a vehicle is 56 cents per mile. These expenses are subject to strict substantiation rules. Please see our articles on business use of vehicles and business meals and entertainment expenses for some of the substantiation requirements.
  • Personal, Living and Family Expenses: These are typically not deductible, but there are exceptions.

The above discussion relates solely to your Federal income taxes. The rules for your individual state income taxes may differ.

If you would like more information about Pennsylvania Elder Law, Business Law or Tax Law, please contact an experienced Pennsylvania Attorney who is also a Certified Public Accountant (CPA) via email or phone us at (724) 216.6551 at our Greensburg, Pennsylvania office.

The Iezzi Law Office serves clients in southwestern Pennsylvania, including Greensburg, Pittsburgh, Delmont, Monroeville, Murrysville, Latrobe, Irwin, Uniontown, Connellsville, Indiana, Somerset, and other towns located in Westmoreland County, Allegheny County, Fayette County, Indiana County, and Somerset County.

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IRS CIRCULAR 230 DISCLOSURE:

To ensure compliance with requirements imposed by the IRS, we inform you that any U.S. tax advice contained in this communication (including any attachments) is not intended or written to be used, and cannot be used, for the purpose of (i) avoiding penalties under the Internal Revenue Code or (ii) promoting, marketing or recommending to another party any transaction or matter addressed herein.