Managing Your Money

Deducting job hunting expenses

Are job hunting expenses for new college graduates deductible?

Due to the very tight job market, a large percentage of recent college graduates are still looking for work and they are incurring a lot of expenses in their search. Many grads think that they can deduct these expenses but, unfortunately, that is not the case.

Job hunting expenses are only deductible if they are incurred while looking for a new job in your current line of work. Job hunting expenses are not deductible if you are looking for a job in a new field or a new business and recent grads who are looking for their first jobs are out of luck.

The inability to deduct the expenses is probably not a huge setback because the deduction is only available to taxpayers who itemize and the expenses are treated as miscellaneous itemized deductions -- which are allowed only to the extent they exceed 2 percent of adjusted gross income.

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