Deducting Job Search Expenses: When They Still Apply

Quick answer

Most job search expenses that employees once deducted as miscellaneous itemized deductions are suspended for tax years 2018 through 2025 by the Tax Cuts and Jobs Act (TCJA). However, self‑employed taxpayers, and a few specific employee groups, can still claim qualifying expenses. (See IRS guidance: Publication 535 and Publication 463.)

How the rules changed and why it matters

Before 2018, many taxpayers could deduct unreimbursed job search costs as miscellaneous itemized deductions subject to the 2% of adjusted gross income (AGI) floor. The TCJA (Pub. L. 115‑97) suspended those miscellaneous itemized deductions for tax years 2018–2025. That means:

• W‑2 employees generally cannot deduct job search expenses on Schedule A through 2025.
• Self‑employed people may still deduct job search expenses that are ordinary and necessary to their trade or business on Schedule C (Form 1040).
• Certain categories of employees — for example, qualified performing artists, some reservists, and fee‑basis government officials — still use Form 2106 or other provisions to deduct allowable expenses; check current IRS instructions to confirm eligibility.

Why this matters: in my practice advising clients, I’ve seen people assume every job‑hunting expense is deductible and then face surprises during tax preparation. Knowing whether you’re an employee or self‑employed determines whether you should be tracking and classifying job search spending.

(Authoritative references: IRS Publication 535, Business Expenses — https://www.irs.gov/publications/p535; IRS Publication 463, Travel, Gift, and Car Expenses — https://www.irs.gov/publications/p463.)

Who can still deduct job search expenses?

1. Self‑employed taxpayers (Schedule C filers)

• If you run a business or are an independent contractor, ordinary and necessary costs tied to finding clients, marketing yourself, or maintaining your trade can be deducted on Schedule C as business expenses. Examples: website hosting, portfolio production, professional memberships, and targeted travel to meet clients.
• These expenses must be ordinary (common in your trade) and necessary (helpful and appropriate for your trade) — the standard in Section 162 of the Internal Revenue Code. See IRS Publication 535 for details.

1. Certain employees in designated categories

• A handful of employee groups remain able to deduct unreimbursed business expenses (Form 2106 still applies in limited situations). These include, for example, some performing artists, certain armed forces reservists, and some fee‑based government officials. The eligibility is narrow and governed by IRS rules and thresholds.

1. State tax rules may differ

• Some states did not conform to the TCJA suspension and still allow miscellaneous deductions at the state level. If you live in a nonconforming state, you may have state tax deductions even when federal law disallows them. Always check state tax instructions or ask a tax pro.

(See FinHelp coverage: “When You Can Deduct Job Hunting Expenses” for related discussion: https://finhelp.io/glossary/when-you-can-deduct-job-hunting-expenses/.)

Typical expenses that can be deductible for self‑employed taxpayers

• Marketing and advertising (portfolio, website, hosting, paid listings)
• Travel to meet prospective clients or attend trade shows (deductible per Publication 463 rules)
• Professional fees (resume or portfolio services, business coach, career‐consulting when directly tied to your business activities)
• Office supplies, software, and subscriptions used to find or service clients
• Job placement or recruitment agency fees when you’re operating as a business

Examples from practice: I’ve worked with freelance designers who deducted costs to update portfolios, pay for job boards, and travel for client pitches — all properly recorded and reported on Schedule C with supporting receipts.

Expenses that are generally not deductible for employees (federal law)

• Ordinary job search costs for W‑2 employees (airfare to interviews, resume writing, job placement fees) are disallowed at the federal level through 2025 unless you fit one of the narrow exceptions.
• Costs incurred while changing careers into a new field are generally not deductible even historically — the search must be for work in the same trade or business.
• Reimbursed expenses are not deductible. If your employer reimburses you under an accountable plan, you cannot claim those costs.

How to claim qualifying expenses (forms and reporting)

• Self‑employed: report on Schedule C (Form 1040). Business travel follows Publication 463 rules; other ordinary business costs follow Publication 535.
• Eligible employees in special categories: follow Form 2106 and its instructions, and review the latest IRS guidance because rules and thresholds can change.
• Keep clear documentation — receipts, mileage logs, invoices, written statements about the business purpose — in case of IRS questions.

(IRS Form 2106 info: https://www.irs.gov/forms-pubs/about-form-2106)

Recordkeeping and substantiation (practical steps)

• Retain receipts or digital copies for all expenses.
• For travel, keep dates, locations, business purpose, and mileage logs (per Publication 463). Use an app or spreadsheet to log trips contemporaneously.
• For services (resume writers, career coaches), save contracts and proof of payment tying the expense to your trade or business.
• Separate personal and business costs. If an expense partly benefits personal use (e.g., part of a trip), allocate only the business portion.

In practice, better records reduce audit stress and make it easier to work with your accountant at year end.

Common mistakes and how to avoid them

• Treating all job search costs the same. Employees and self‑employed taxpayers follow different rules.
• Failing to document business purpose or mixing receipts with unrelated personal spending.
• Counting on deductions that are suspended at the federal level; assuming federal rules apply equally to state returns.

Planning and strategy tips

• If you expect to be self‑employed or do ongoing freelance work, set up simple bookkeeping right away (separate bank account, expense categories). That preserves Schedule C eligibility.
• Ask your employer to reimburse legitimate job‑search support? Employers rarely reimburse job search costs, but they might invest in outplacement services for laid‑off staff — those are employer expenses, not deductible by the employee.
• Review your state tax rules at tax time; you may have opportunities at the state level even when federal deductions are suspended.
• Keep an eye on 2026 tax law updates. The TCJA suspension expires after 2025 unless Congress acts to extend or change it. Consider discussing mid‑ or long‑term tax planning with your advisor.

Real‑world examples

• Freelance copywriter: deducted website redesign, portfolio production, and travel to a client pitch on Schedule C. Clear invoices and a business purpose supported the deductions.
• W‑2 employee switching careers: incurred travel and resume costs but could not deduct them on federal return because the search was either for new occupation or employee deductions are suspended.

Quick checklist before you claim anything

• Are you self‑employed or an eligible special‑status employee? If yes, proceed. If you’re a regular W‑2 employee, federal deduction likely disallowed through 2025.
• Was the expense ordinary and necessary to your trade or business? If yes, document it.
• Do you have receipts, logs, and a clear business purpose? Good documentation reduces risk.
• Review state rules and consult a tax professional if you’re unsure.

(Helpful related reads on FinHelp: “Common Above‑the‑Line Deductions for Self‑Employed Individuals” — https://finhelp.io/glossary/common-above-the-line-deductions-for-self-employed-individuals/; “Form 2106 — Employee Business Expenses” — https://finhelp.io/glossary/form-2106-employee-business-expenses/.)

Final notes and professional disclaimer

This article summarizes federal tax rules in effect through 2025 and highlights where job search expense deductions still apply. It is intended for educational purposes and does not replace personalized tax advice. Tax law and IRS guidance can change; consult a CPA, enrolled agent, or qualified tax professional for advice tailored to your situation.

Authoritative sources cited: IRS Publication 535 (Business Expenses), IRS Publication 463 (Travel, Gift, and Car Expenses), Form 2106 information and TCJA legislative text (Pub. L. 115‑97). Visit IRS.gov for the latest guidance.

If you’d like, I can prepare a one‑page checklist you can use during a job search to track deductible expenses for self‑employed reporting or to check state conformity—let me know.