Where Do I File My Unemployment Expenses on Schedule A?

You may be able to deduct the cost of looking for work.

You may be able to deduct the cost of looking for work.

Being unemployed and looking for work isn’t cheap. From paying for copies of your résumé to traveling to interviews, you have expenses. The IRS allows you to deduct some of these expenses on Schedule A if you itemize. The job-hunting expenses are considered miscellaneous deductions, and you report them on line 21 of Schedule A as unreimbursed employee expenses. Deducting these expenses can help offset the tax you’ll owe if you receive unemployment benefits.

Deductible Expenses

You may deduct expenses such as the cost of producing, copying and mailing résumés; fees for registering with job search companies; cost of additional training to update or improve your job skills; and travel to out-of-town interviews or job fairs. You may deduct transportation costs for driving to interviews and job fairs, including the standard mileage rate for the miles you traveled related to your job search, tolls and parking fees. If you move to a new location to accept a job, your moving expenses may be deductible.

Two Percent Rule

You may only deduct miscellaneous deductions that are more than 2 percent of your adjusted gross income. This includes your total miscellaneous deductions, not merely those associated with looking for a new job. Add in other expenses such as tax preparation fees, investment expenses, casualty and theft losses and safe deposit box fees. Don’t forget unreimbursed business expenses from your previous job and items such as professional dues and licenses necessary in your work.

Exceptions

The IRS only allows you to deduct the expenses associated with looking for work in your current field. You can’t deduct the cost of training for a new profession. If you take a break from working for an extended time and then resume your job search, your expenses may not be deductible. The IRS does not specify a time period. Also, if you’ve never held a job before, you can’t deduct expenses associated with searching for your first job.

Claiming Your Deductions

You don’t have to list all of your unemployment expenses separately. Add them, together with your other business expense miscellaneous deductions and report the total on Schedule A. Report all the expenses and the tax form will walk you through figuring the percentage you may deduct. Keep your receipts and other supporting documents, such as a journal showing your job-hunting efforts and appointments and a log of your mileage, in case the IRS questions any of your deductions.

 

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