New year, new job? If you’ve decided it’s time to move on from your current position and look for a new one, you may be able to take a tax deduction for some of your job search costs. Here’s what you need to know:
1. Same Occupation. You can’t deduct expenses for a job search in a new occupation; your expenses must be for a job search in your current line of work.
2. Resume Costs. You can deduct the cost of preparing and mailing your resume.
3. Travel Expenses. If you travel to look for a new job, you may be able to deduct the cost of the trip. To deduct the cost of the travel to and from the area, the trip must be mainly to look for a new job. You may still be able to deduct some costs if looking for a job is not the main purpose of the trip.
4. Placement Agency. You can deduct some job placement agency fees you pay to look for a job.
5. First Job. You can’t deduct job search expenses if you’re looking for a job for the first time.
6. Substantial Job Break. You can’t deduct job search expenses if there was a long break between the end of your last job and the time you began looking for a new one.
7. Reimbursed Costs. Reimbursed expenses are not deductible.
8. Schedule A. You usually deduct your job search expenses on Schedule A, Itemized Deductions. You’ll claim them as a miscellaneous deduction. You can deduct the total miscellaneous deductions that are more than two percent of your adjusted gross income.
9. Premium Tax Credit. If you receive advance payments of the premium tax credit it is important that you report changes in circumstances, such as changes in your income or eligibility for other coverage, to your Health Insurance Marketplace. Other changes that you should report include changes in your family size or address.
Advance payments of the premium tax credit provide financial assistance to help you pay for the insurance you buy through the Health Insurance Marketplace. Reporting changes will help you get the proper type and amount of financial assistance so you can avoid getting too much or too little in advance.
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