Deductible Job Search Expenses
If you are looking for a new job, expenses related to that search are deductible if your search is confined to your present occupation. Accountants looking for jobs as accountants can deduct their expenses, even if they do not find a suitable position. Accountants who want to be chefs are out of luck.
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Unemployment
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If you are unemployed, you can deduct the expenses you have incurred related to your search--as long as you want to replace the occupation you had. First-time job seekers may not claim this deduction. You may deduct these expenses even if your jobs search is unsuccessful.
Resumes and Headhunters
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You may deduct expenses associated with creating a resume and mailing it out. You may also deduct any fees you pay an agency to help find you a job. You may not deduct expenses incurred by your employer for the agency--for example if your new employer pays you back for the costs of the agency.
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Mileage
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If you travel for the primary purpose of finding a new job in your present field, those expenses are deductible. This will include plane tickets and accommodations. You may also deduct mileage expenses--the IRS rate is 55 cents per mile in 2009. The IRS warns that the amount of time not spent on a job search while traveling is an important consideration when claiming this expense, but even if a trip is primarily for pleasure, costs incurred while on vacation related to a job search may be deductible.
Time Frame
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The IRS says that you may not be able to deduct expenses if there was a substantial break between the "ending of your last job and your looking for a new one." It doesn't define what substantial means, but the wording implies that expenses may be deductible if your search begins soon after your job separation, no matter how long you are unemployed. So don't go backpacking for three months in Thailand after you are laid off if you are worried about tax deductions.
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References
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