Job Hunting Expenses

SIGNIFICANT UPDATE ON THIS ARTICLE!
 
If you live and seek a job in the U.S. and are currently already working in finance, don’t forget that any non-reimbursed job search expenses related to finding your quant job can be deducted on your tax return. It’s important to note that this works only if you’re looking for a new job in the same field; but if you did an internship (summer or school-year) in finance, this applies to you, too. But if you’ve never worked in finance before and are looking for your first finance job, you won’t be able to take advantage of the deductions.
 
Note that you can deduct non-reimbursed job search expenses even if you don’t get the job.

Deductible job hunting-related expenses include:

 
  • Airfare
  • Automobile mileage
  • Train fare
  • Taxi fare
  • Lodging
  • Printing and mailing costs related to your resume
  • Books (like my new book Smile) that help you search for jobs
  • New clothes and shoes you buy expressly for wearing to job interviews (maybe…)
  • Etc.

Of course, you should check the relevant IRS publications or consult a qualified tax professional for the details.

The key thing to remember (other than the abovementioned same-field test) is, only unreimbursed expenses can be deducted on your income tax return. So, for instance, if a potential employer reimburses you for your flight, you won’t be able to claim that expense as a deduction. The IRS will know about this reimbursement because 1) the employer will require your social security number before cutting you a check, and 2) the employer will report this reimbursement to the IRS (along with your name and social security number) in order to claim a tax benefit for itself. So don’t try to cheat! But if you have legitimate, unreimbursed job-hunting expenses, deduct them!

(Note: you can also deduct unreimbursed moving expenses when you relocate to a new locale for your new job, if you meet certain IRS criteria.)

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2 Responses to Job Hunting Expenses

  1. Allen says:

    A reminder, it is subject to the 2% AGI rule. 

  2. Brett says:

    Yep, the job-hunting expenses are subject to the 2% floor rule, but they are lumped together with other "miscellaneous" deductions such as gambling losses, tax counseling fees, etc. Moving expenses are "above the line" and thus not subject to the 2% floor.
     
    Thanks, Allen.

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