In the US tax code, career coaching and other job search expenses are "miscellaneous itemized deductions, and you are allowed to deduct any miscellaneous itemized deductions that exceed 2% of your Adjusted Gross Income (AGI). For example, if your AGI is $100,000 and you have $4,000 of career coaching and other job search expenses (and no other miscellaneous itemized deduction, you can deduct $2,000.
- Even If You Fail, You Succeed.
You don’t actually have to land a new job to be able to deduct job search expenses. Merely trying to find a job in your current field may allow you to deduct all of your job search expenses, no matter the ultimate outcome.
- You Must Look for Work in the Same Field.
Your job hunting expenses are tax deductible only if they are in pursuit of employment in the same field that you now or last worked in. If you’re currently in construction, but are looking for another position in construction, your job search related expenses may be tax deductible. However, if you are looking for a career switch and you’re targeting welder positions, any expenses related to your job hunting will not be tax deductible.
- You Must Already Be Employed
The job search deduction is not available to those who have never worked before. Graduating students searching for their first jobs unfortunately cannot deduct their job hunting expenses, but once you start working you may be able to deduct job search costs when seeking employment in the same field.
- Nearly All Job Search Expenses May Be Tax Deductible
Just about every expense directly related to your job search is tax deductible. Such expenses could include payments to job placement agencies, costs to print resumes, costs to mail those resumes, and even in-town or out-of-town trips to your interviews. Make sure you save your receipts!