What Are the Tax Rules for Job Searches and Moving for Work?

The short answer: for most employees today, job search and moving expenses are not deductible. The Tax Cuts and Jobs Act (TCJA) suspended the moving expense deduction and the exclusion for employer‑paid moving benefits for tax years 2018 through 2025; that means only limited exceptions apply now. Active‑duty military members moving due to a permanent change of station (PCS) can still deduct moving costs using Form 3903, and self‑employed taxpayers may be able to claim specific job‑search or relocation costs as ordinary and necessary business expenses when the expenses directly relate to their business activity (see IRS Publication 535 and Form 3903).

Sources: IRS Moving Expenses page and Form 3903 (military) (https://www.irs.gov/credits-deductions/individuals/moving-expenses; https://www.irs.gov/forms-pubs/about-form-3903).

Why this matters: many job seekers and newly relocated employees assume the old rules still apply. In my practice advising clients on household moves and career transitions, I often see preventable tax surprises because people don’t track which costs remain deductible and which do not.

Key rules at a glance

  • Employees: Generally no deduction now for job search or moving expenses for tax years covered by the TCJA suspension. Employer‑paid moving reimbursements are usually taxable to the employee unless the employer treats them as qualified moving expenses for a military move. (IRS)
  • Active‑duty military: Moving expenses related to a PCS remain deductible and are reported on Form 3903. (IRS)
  • Self‑employed / business owners: Expenses that are ordinary and necessary for your trade or business—such as travel to meet prospective clients, advertising, or specific relocation costs tied to establishing or maintaining the business—may be deductible under business expense rules (IRS Publication 535). Job search costs to find employment as an employee generally are not deductible for individuals who expect wages.
  • State rules: Some states offer different treatment for moving expenses or job search costs. Check your state tax agency.

Authoritative references

Practical examples you can apply

1) Employee relocating for a new job (non‑military)

  • Scenario: You move across state lines for a new salaried position. You pay movers, temporary lodging, and travel.
  • Tax outcome: Under current federal law through 2025, those moving expenses are not deductible for most employees and employer reimbursements are generally taxable income unless excluded by other rules. Track these costs for budgeting and possible employer reimbursement negotiation, but don’t expect a federal tax deduction.

2) Active‑duty military member (PCS)

  • Scenario: A military service member relocates because of orders.
  • Tax outcome: Eligible to deduct or exclude qualified moving expenses related to a PCS. Use Form 3903 to calculate the deduction. Keep receipts for moving companies, travel, and storage. (IRS Form 3903)

3) Self‑employed consultant searching for new clients

  • Scenario: You’re a freelancer who travels to city hubs to meet potential clients, buy supplies for a new location, or market services.
  • Tax outcome: Deductible as ordinary and necessary business expenses if the costs relate directly to your trade or business—document business purpose and keep invoices. See Publication 535. Travel for client meetings and advertising are classic examples of deductible business expenses if properly documented.

When job‑search costs might be deductible

  • Employee vs. self‑employed distinction: Job search costs to look for a new job as an employee are generally not deductible for federal tax purposes. However, if you are searching for business as a self‑employed person or independent contractor, reasonable expenses to obtain customers or contracts are business deductions.
  • Costs that historically were deductible (resume services, placement agency fees, travel for interviews) are currently disallowed for employees under the TCJA suspension. If you’re uncertain whether your job search is part of an ongoing trade or business, consult a tax professional—classification hinges on facts and intent.

Common mistakes and how to avoid them

  • Mistake: Treating moving reimbursements from an employer as tax‑free when they are not. Solution: Confirm whether reimbursements are reported on Form W‑2. If the employer designates a payment as a reimbursement (not a taxable fringe benefit) and the move qualifies (rare for most employees now), specific records and forms may apply.
  • Mistake: Skipping documentation. Solution: Keep receipts, contracts, dates of travel, and the business purpose for any activity you plan to claim. Without documentation, the IRS can disallow deductions on audit.
  • Mistake: Applying state rules to federal returns. Solution: Check state tax law—some states still allow moving‑expense deductions even when federal law disallows them.

Recordkeeping checklist

  • Itemized receipts for movers, storage, packing supplies, and travel
  • Mileage logs and travel purpose notes for any business travel
  • Copies of job‑search invoices (resume writing, placement fees) if you are self‑employed and intend to claim them
  • Employer communications about reimbursements and any relocation allowance
  • Dates: when you started/ended your job search or the date of your move, and the date you began work at the new location (if relevant)

Tax planning strategies (practical, within current law)

  • Negotiate relocation benefits: Since federal deductions for moving are limited, ask prospective employers for relocation packages or direct reimbursement and confirm tax treatment up front.
  • For contractors and freelancers: Structure job‑search activity as part of your business operations (e.g., marketing, travel to meet prospects) and document it thoroughly to support business expense deductions. See IRS Publication 535.
  • State opportunities: If you move between states, evaluate state tax rules and credits—one state may allow a moving deduction or credit even if the federal government does not. See our article on State Tax Deductions and Credits to Consider When Moving (internal link).

Internal resources

FAQ (quick answers)

Q: Can I deduct travel expenses for job interviews?
A: Generally no for employees under current federal law; self‑employed taxpayers may deduct travel that qualifies as a business expense. See IRS Publication 463.

Q: Do I have to report employer moving reimbursements?
A: Often yes. Unless reimbursements are for qualified moving expenses for a military PCS or otherwise excluded by law, they are usually taxable and appear on your W‑2.

Q: Will the rules change after 2025?
A: The TCJA suspension is scheduled through 2025. Lawmakers could extend or change the rules; watch IRS guidance and Congress for updates.

Professional insight

In my experience advising clients over 15+ years, I’ve found the most valuable action is proactive documentation and employer negotiation. When federal deductions are limited, a well‑negotiated relocation package or an employer‑paid taxable reimbursement (combined with a housing or lump‑sum allowance) often yields better financial results than hoping to capture a deduction at tax time.

Final checklist before you file

  • Confirm whether you (or your employer) reported moving reimbursements on Form W‑2.
  • Gather receipts and business‑purpose notes for any travel or job‑search activities you intend to treat as business expenses.
  • Verify state rules if you moved across state lines.
  • If you’re active‑duty military, complete Form 3903 and attach it to your return if you claim a deduction.

Professional disclaimer

This article is for educational purposes and reflects federal tax rules as of 2025. It does not replace personalized tax advice. Tax situations can be complex; consult a qualified CPA, enrolled agent, or tax attorney for recommendations specific to your facts.

Authoritative sources

If you want help assessing a specific scenario (for example, whether a particular expense qualifies for a business deduction), consult a tax professional and bring supporting documentation such as invoices, travel logs, and employer correspondence.