David Wancura

Many taxpayers spend time during the summer months updating their résumé and
attending career fairs. The Internal Revenue Service reminds job seekers that
you may be able to deduct some of the expenses on your tax return.

Here are seven things the IRS wants you to know about deducting costs related
to your job search.

1. To qualify for a deduction, the expenses must be spent on a job search in
   your current occupation. You may not deduct expenses you incur while looking for
   a job in a new occupation.

2. You can deduct employment and outplacement agency fees you pay while looking
   for a job in your present occupation. If your employer pays you back in a later
   year for employment agency fees, you must include the amount you receive in your
   gross income, up to the amount of your tax benefit in the earlier year.

3. You can deduct amounts you spend for preparing and mailing copies of your
   résumé to prospective employers as long as you are looking for a new job in your
   present occupation.

4. If you travel to an area to look for a new job in your present occupation,
   you may be able to deduct travel expenses to and from the area. You can only
   deduct the travel expenses if the trip is primarily to look for a new job. The
   amount of time you spend on personal activity compared to the amount of time you
   spend looking for work is important in determining whether the trip is primarily
   personal or is primarily to look for a new job.

5. You cannot deduct job search expenses if there was a substantial break
   between the end of your last job and the time you begin looking for a new one.

6. You cannot deduct job search expenses if you are looking for a job for the
   first time.

7. The amount of job search expenses that you can claim on your tax return is
   limited. You can claim the amount that is more than 2 percent of your adjusted
   gross income. You figure your deduction on Schedule A.