Previously, I discussed the tax consequences of losing your job. But did you know that there are certain tax deductions you can take while looking for your next job (even if you don't get hired)? These include:
- Employment and outplacement agency fees.
- Amounts spent for preparing and mailing resumes.
- Mileage and parking expenses for interviews
- Going back to college to take some courses to improve your skills. (In this case, you may be able to either take a deduction to gross income or obtain a tax credit. See IRS Pub 970 for details.)
- If you find a new job and have to relocate, you may be able to deduct some of your moving expenses. See IRS Pub 521.
You must itemize deductions to claim these unreimbursed expenses. Job hunting expenses are considered a miscellaneous itemized deduction subject to the 2 percent of your adjusted gross income (AGI) limitation. See the instructions for completing Line 21 of Form 1040 Schedule A.