I am sure you have heard it said that the average person changes jobs 11 times in their lifetime. There are 2 major deductions that are avaialable related to job changes – the moving deduction and the job-hunting expense deduction.
The moving deduction is the most valuable since it is directly deductible against your income for both Federal and state taxes. You would likely qualify to deduct the costs of a move if you moved more than 50 miles for a new job. Technically, the distance between your new job location and former house must be at least 50 miles more than the distance between the old job location and your former house. If there is no established old job location, then the distance test is met if the new workplace is at least 50 miles from your former home…blah blah blah…just keep in mind “50 miles” and we can figure out the rest to see if you qualify.
In addition, you must work as a full-time employee at the new location for at least 39 weeks in the 12 month period following arrival in the new location and the move has to be “closely related” in time to the start of work at the new job location.
The job-hunting expense deduction is less valuable since it is a miscellaneous itemized deduction and not deductible for state taxes. Miscellaneous itemized deductions are only deducible if you itemize, and then only to the extent that they exceed 2% of your income for the year. Generally, you can count as a miscellaneous itemized deduction any costs that you incur so that you can earn taxable income – job-hunting expenses certainly fit this description.
Job-hunting expenses include employment agency fees, resume preparation fees, career couseling or placement fees, transportation costs to job interviews (travel, hotel, meals, mileage, flights), and publications that you purchase or subscribe to that advertise employment opportunities. This deduction only applies to those who are seeking out work in the same field that they are currently employed in. That means that first-time job seekers are ineligible for the tax break, as are those seeking to enter into a new industry.