Tax Tip: What You Can Write Off on Your Job Search

Last Updated Apr 20, 2010 1:25 PM EDT

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For many of us who've spent years rising through the corporate ranks, the job search represents a new experience in free agency. Many tasks and processes we're accustomed to delegating as senior management become our own as we craft our next career steps.

Consider tax time. Of course, you're already used to filing personal deductions -- but when you're on the job hunt, the list of deductions grows longer and more confusing. When you're working for someone else, everything from business travel to marketing to office supplies comes out of their budget; when you're working for your own next job, you'll want to square all these expenses with the IRS (and with the help of an accountant or other qualified financial adviser.)

In this story, "Tax Tips for Job Hunters: What You Can and Can't Deduct," CBS MoneyWatch identified some great do's and don'ts. The piece identified a key distinction: The government will let you write off expenses (including education and coaching) related to getting a job in the same field but not when switching careers.

Here are some other distinctions the government draws, according to TheLadders' Lisa Vaas in "Job-Search Deductibles: Evade Mistakes, Not Taxes."

  • Relocation. Moving expenses are deductible, according to Melissa Labant, a tax expert with the American Institute of Certified Public Accountants -- but only if your new job is at least 50 miles further from your current home than your previous job was, and usually only if you're moving for full-time work.
  • Travel and meals. You can generally deduct 50 percent of your T&E expenses on the job search, according to the IRS. That applies meals you buy while traveling away from home, whether eating alone or with others. But be careful about mixing business with pleasure: "People take trips to look for jobs, but it's more a vacation," Labant said. "If they're vacationing three days and looking for work one day," that's not deductible. "The primary purpose has to be to seek a job, not personal recreation."
  • Wardrobe and grooming. Clothes may make your personal brand, but clothing and grooming expenses are not deductible, tax experts told TheLadders.
Bottom line: Be careful, but don't be shy about speaking with a financial expert to make sure you claim every deduction to which you're entitled. The government is generally in favor of people finding work, and many of the rules (while complex) tilt in your favor.

More tax tips on MoneyWatch:
Weirdest Tax Break: Midwest Colleges?
Tax Tip: Cut Taxes for Your Heirs
Lower Your Taxes in Retirement

  • Matthew TheLadders

    Matthew Rothenberg is editor-in-chief for TheLadders, the world's leading online service catering exclusively to the $100K+ job market. In addition to traditional job search services, also provides a host of specialized career development resources. Previously he worked at Ziff Davis Media, ZDNet, CNET, and Hachette Filipacchi.