Tax Reimbursement for Job Hunting Travel
Travel costs are often a necessary expense when you look for a job. The Internal Revenue Service (IRS) allows you to deduct some of those costs on your federal tax return. It is advisable to keep travel expense receipts and document your mileage when you travel to employment sites.
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Qualifications
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To qualify for tax-deductible travel expenses associated with job hunting, your potential employment must be closely related to your most recent employment. If you change career paths, your job search expenses are not tax deductible. According to the IRS, if a significant amount of time has passed since your last employment, you may not qualify for tax deductions related to a job search.
Deductible Expenses
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The IRS allows you to deduct airfare, airline fees, car expenses, a portion of your meal expenses, lodging, tolls, administrative fees, parking costs and all related taxes on your federal return. If you travel by car, you can deduct the standard mileage rate instead of itemizing your car expenses. You cannot deduct any expenses related to personal travel while you are searching for a job.
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Non-Reimbursed Costs
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If a potential employer reimburses you for any costs related to your job search, you cannot deduct those expenses on your annual tax return. If a job fair or a hiring agency pays for parking fees, lunch expenses or administrative costs, you cannot deduct those expenses on your return. The IRS does not allow you to deduct any reimbursed expenses on tax Form 1040.
Schedule-A Deductions
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Non-reimbursed job hunting expenses must be itemized on Schedule A of your federal tax return. It is advisable to keep receipts for all of your expenses in case you are audited by the IRS. If you maintain accurate records of your job-search travels, you can use them to show how much time lapsed after your previous employment ended and before your job search began.
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References
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