OVERVIEW
Searching for a new job can run up costs. Can you deduct them on your tax return? Yes, but with a few limitations.
Beginning in 2018, job search expenses are no longer eligible for a tax deduction on your federal tax return however, some states such as California continue to provide a deduction on your state tax return if you qualify.
Video transcript:
Hi, I’m Adrienne from TurboTax with an update on tax deductions for job hunters.
Searching for a new job can run up costs. Can you deduct them on your tax return? Usually with a few limitations.
Job search expenses are deductible when you look for work in the same occupation. Expenses incurred hunting for a brand new occupation, even after a layoff, are not eligible. Nor can you deduct expenses when looking for a job for the first time or after a substantial break between jobs.
Job searchers sticking to the same occupation could enjoy the following deductions:
- Airfare and lodging if an interview requires travel or an overnight visit to another city. Now keep in mind, you can only deduct travel-related expenses if they are primarily looking for work.
- Outplacement services. But if you take a deduction and an employer reimburses you later, you'll have to treat the reimbursement as income.
- Child and dependent care costs, but only for the time during which you are absent or unavailable. Be sure you can document that you were job hunting when care was provided.
- Postage and/or shipping charges when sending work-related material to prospective employers, telephone calls that relate to your search, and resume printing and copying.
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