Job Search and Career Tax Deductions
Job search expenses were a tax deduction through the 2017 tax year. The U.S. House and Senate passed the Tax Cuts and Job Acts (TCJA) in December 2017, with provisions that took effect in 2018 and will last through 2025. This bill suspends or eliminates several itemized deductions, including the option to deduct job search-related expenses.
2018–2025 Job Search Expenses Tax Deduction Elimination
Several itemized deductions won't be available or will change beginning in 2018 and going forward. For example, the deduction for moving expenses has been suspended by the TCJA through 2025 if you're relocating due to a job transfer, a new job, or to start a business, although it still remains in place for servicemembers. But some tax deductions remain in effect for employee and business-related expenses.
Deductions for Unreimbursed Employee Expenses
Most workers can no longer claim any miscellaneous itemized deductions that are subject to the 2% of adjusted gross income (AGI) limitation, including unreimbursed employee expenses. You might be able to deduct certain unreimbursed employee business expenses if you are an eligible educator, however, or if you fall into one of the following categories of employment:
- Armed Forces reservists
- Qualified performing artists
- Fee-based state or local government officials
- Employees with impairment-related work expenses
You can deduct up to $250 of unreimbursed trade or business expenses if you're an eligible educator. This increases to $500 if you're married filing jointly and both spouses are eligible educators, but not more than $250 each.
Qualified expenses are amounts you paid or incurred for participation in professional development courses, or for books, supplies, computer equipment (including related software and services), other equipment, and supplementary materials for use in the classroom.
You can additionally claim a deduction for expenses paid after March 12, 2020 to prevent the spread of COVID-19 in the classroom. These include the purchase of face masks, disposable gloves, hand soap and sanitizer, disinfectants, barriers, and tape, paint, or chalk used to demarcate socially-distanced areas, as well as any other items that might be recommended by the Centers for Disease Control and Prevention (CDC).
Business Owners and Self-Employed Individuals
Individuals who own a business or are self-employed can deduct car and other expenses on their tax returns. The expenses must be split if a taxpayer uses the car for both business and personal purposes. It's based on the portion of mileage used for business.
Rules and exceptions for these deductions are complex, so it makes sense to consult with a tax professional to determine your ultimate eligibility and discuss the records that you need to maintain.
NOTE: The information contained in this article is not tax or legal advice and is not a substitute for such advice. State and federal laws change frequently, and the information in this article may not reflect your own state’s laws or the most recent changes to the law.