Articles

Looking to Change Jobs? You May Qualify for a Tax Break by Nancy M. Valdes, CPA


Posted on September 27, 2016 by

The Internal Revenue Service (IRS) allows U.S. taxpayers to deduct costs for certain expenses they incur while searching for new jobs.

 

To qualify, a taxpayer must seek employment in his or her current line of work. Expenses incurred searching for a job in an entirely new field are not deductible.  Similarly, taxpayers cannot deduct job-search expenses when they are looking for their first jobs nor when there is a long break in time between when one job ends and the search for new employment begins.

Examples of deductible job-search expenses include costs for preparing resumes, including writing and copy services, as well as any hotel and transportation costs incurred when the search requires out-of-town travel.   If a taxpayer pays fees to an employment agency, headhunter or staffing firm, he or she may deduct those costs only when those fees are not paid by a future employer at a later date.

 

Taxpayers may deduct job search expenses as miscellaneous deductions on IRS Form 1040, Schedule A, Itemized Deductions, only when the amount exceeds two percent of their individual adjusted gross income.

About the Author: Nancy M. Valdes, CPA, is a senior manager with Berkowitz Pollack Brant’s Tax Services practice, where she focuses her practice on tax strategies for business owners and high-net-worth individuals and families. She can be reached at the CPA firm’s Miami office at (305) 379-7000 or via email at info@bpbcpa.com.