Q: I recently lost my job. Am I able to deduct my travel or vehicle expenses while I job search
A: First off, I am sorry to hear about your situation. Job search can be a stressful, but hopefully some of the information shared below will help you navigate the process.
The good news is that travel expenses may be tax deductible while you are searching for a job, along with a few other associated costs. To get you started, here are 4 things to know if you are looking to deduct expenses while job searching:
- You must be searching for a job in the same occupation. In order to qualify for a deduction, your expenses must be spent on job search in your current occupation, as opposed to looking for a job in a new occupation. For example, if you are a lawyer applying to a new law firm your expenses may be deductible, but not if you are switching careers and decide to be a teacher. Your job search also can’t be related to your first job.
- Travel Expenses. If you travel to look for a new job, you can deduct the travel expenses to and from the area to which you traveled. You may even be able to deduct airfare,lodging and meals. However, you can only deduct the travel expenses if the trip is primarily to look for a new job, and not personal reasons. Remember to keep in mind that the standard mileage rate is 54 cents per mile.
- Résumé Costs. In addition to travel, you can deduct the money you spend preparing and mailing copies of your résumé to prospective employers.
- Placement Agency. If you are using a placement agency to help find new jobs in your current occupation, you can deduct some of their fees.
When you go online to file your taxes this year, don’t worry about knowing the rules for deducting job search expenses. TurboTax ask simple tax questions and will give you the tax deductions and credits you are eligible for based on your entries.