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FAQ – Can I Deduct the Cost of a Job Search

Job Search Tax DeductionsThe IRS has some basic guidelines & requirements that you will have to meet when it comes to tax deductions for job seekers. The following guidelines should be used to determine what expenses are eligible for the job search deduction:

  • Tax deductions only apply to looking for a new job that is within your current profession. You cannot use the tax deductions to look for a job in a different profession or career path and “first-time job” searchers cannot use any of the deductions.
  • You can deduct any fees associated with a placement agency or temp agency / service. However, if you are reimbursed by your employer for the cost of a placement agency, you must report this as regular income and will not be able to use the deduction.
  • The IRS does not allow deductions after a “substantial break” between your last job and your current job, however the IRS does not specify the exact amount of time they consider a “substantial break.”
  • Only amounts over 2 percent of your adjusted gross income (AGI) are deductible.

Source – IRS Tax Tips