When Job-Search Expenses Are Tax-Deductible

My daughter graduated from college in the spring and started her first job last month. She spent a lot of money on travel and other costs for her job search over the past few months. Are those expenses tax-deductible?

Job-search expenses for a first job aren’t tax-deductible, but your daughter may be able to get a tax break if she had to move to take the new job. To qualify to deduct moving expenses, the new job must be at least 50 miles farther from your home than the old job was, and a first job must be at least 50 miles from your current home. Your daughter can deduct the cost of hiring movers to pack and transport her possessions or the cost of renting a moving van. She can also deduct travel expenses to her new home, including 23.5 cents per mile, if she drives, plus lodging (but not meals), and the cost of storing her possessions for up to 30 days between moving and delivery.

She doesn’t need to itemize deductions on her tax return to take the break, but she’ll need to submit Form 3903 when she files her 2014 taxes. For more information, see IRS Publication 521 Moving Expenses.

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Your daughter may qualify to deduct job-search expenses in addition to moving if she switches jobs later in the same field. To qualify, she must be looking for a job in the line of work she’s already in, whether or not she gets the job. She can deduct the cost of printing and mailing résumés and posting on job-search sites, plus any employment- and outplacement-agency fees. Travel expenses are deductible if the purpose of your trip is primarily to search for a job (including 56 cents per mile in 2014, if you drive, plus the cost of parking and tolls).

Job-search expenses are a miscellaneous itemized deduction (like employee business expenses and investment-related expenses), and they are deductible only if you itemize and only to the extent that all of your miscellaneous write-offs exceed 2% of your adjusted gross income. For more information, see IRS Publication 529, Miscellaneous Deductions.