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deductible job related expenses

Customer Question

Are expenses related to locating a new job deductible? And if so, where do you enter those? On Schedule A?
Submitted: 11 years ago.
Category: Tax
Expert:  Tammy F. replied 11 years ago.
 The IRS states that:




Job Search Expenses



You can deduct certain expenses you have in looking for a new job in your present occupation, even if you do not get a new job. You cannot deduct these expenses if:





  1. You are looking for a job in a new occupation,



  2. There was a substantial break between the ending of your last job and your looking for a new one, or



  3. You are looking for a job for the first time.



Employment and outplacement agency fees.    You can deduct employment and outplacement agency fees you pay in looking for a new job in your present occupation.


Employer pays you back.   If, in a later year, your employer pays you back for employment agency fees, you must include the amount you receive in your gross income up to the amount of your tax benefit in the earlier year. See Recoveries in Publication 525.


Employer pays the employment agency.   If your employer pays the fees directly to the employment agency and you are not responsible for them, you do not include them in your gross income.


Résumé.   You can deduct amounts you spend for typing, printing, and mailing copies of a résumé to prospective employers if you are looking for a new job in your present occupation.


Travel and transportation expenses.   If you travel to an area and, while there, you look for a new job in your present occupation, you may be able to deduct travel expenses to and from the area. You can deduct the travel expenses if the trip is primarily to look for a new job. The amount of time you spend on personal activity compared to the amount of time you spend in looking for work is important in determining whether the trip is primarily personal or is primarily to look for a new job.

  Even if you cannot deduct the travel expenses to and from an area, you can deduct the expenses of looking for a new job in your present occupation while in the area.

   You may choose to use the standard mileage rate to figure your car expenses. The standard mileage rate for 2004 is 37½ cents per mile. See Publication 463 for more information on travel and car expenses.






Legal Fees



You can deduct legal fees related to doing or keeping your job.






Licenses and Regulatory Fees



You can deduct the amount you pay each year to state or local governments for licenses and regulatory fees for your trade, business, or profession.






Occupational Taxes



You can deduct an occupational tax charged at a flat rate by a locality for the privilege of working or conducting a business in the locality. If you are an employee, you can claim occupational taxes only as a miscellaneous deduction subject to the 2% limit; you cannot claim them as a deduction for taxes elsewhere on your return.






Repayment of Income Aid Payment



An “income aid payment” is one that is received under an employer's plan to aid employees who lose their jobs because of lack of work. If you repay a lump-sum income aid payment that you received and included in income in an earlier year, you can deduct the repayment.






Research Expenses of a College Professor



If you are a college professor, you can deduct your research expenses, including travel expenses, for teaching, lecturing, or writing and publishing on subjects that relate directly to the field of your teaching duties. You must have undertaken the research as a means of carrying out the duties expected of a professor and without expectation of profit apart from salary. However, you cannot deduct the cost of travel as a form of education.






Rural Mail Carriers' Vehicle Expenses



If your expenses to use a vehicle in performing services as a rural mail carrier are more than the amount of your reimbursements, you can deduct the unreimbursed expenses. See chapter 4 of Publication 463 for more information.






Tools Used in Your Work



Generally, you can deduct amounts you spend for tools used in your work if the tools wear out and are thrown away within 1 year from the date of purchase. You can depreciate the cost of tools that have a useful life substantially beyond the tax year. For more information about depreciation, see Publication 946.






Travel, Transportation, Meal, Entertainment, and Gift Expenses



If you are an employee and have ordinary and necessary business-related expenses for travel away from home, local transportation, entertainment, and gifts, you may be able to deduct these expenses. Generally, you must file Form 2106 or 2106-EZ to claim these expenses.


Travel expenses.   Travel expenses are those incurred while traveling away from home for your employer. You can deduct travel expenses paid or incurred in connection with a temporary work assignment. Generally, you cannot deduct travel expenses paid or incurred in connection with an indefinite work assignment.

  Travel expenses may include:



  • The cost of getting to and from your business destination (air, rail, bus, car, etc.),



  • Meals and lodging while away from home,



  • Taxi fares,



  • Baggage charges, and



  • Cleaning and laundry expenses.


  Travel expenses are discussed more fully in chapter 1 of Publication 463.


Temporary work assignment.    If your assignment or job away from home in a single location is realistically expected to last (and does in fact last) for 1 year or less, it is temporary, unless there are facts and circumstances that indicate it is not.


Indefinite work assignment.   If your assignment or job away from home in a single location is realistically expected to last for more than 1 year, it is indefinite, whether or not it actually lasts for more than 1 year.

If you moved because of a change in your job location or because you started a new job, you may be able to deduct your moving expenses if your move is closely related to the start of work. To qualify for the moving expense deduction, you must meet the distance and the time tests.


To read more about this, you should take a look at Tax Topic 455.


Tax Topic 455


There is also a nifty little test that walks you through the process of deciding if moving expenses are tax deductible.


Nifty little test


 


Let me know if you have more questions.

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