Find out which job expenses are tax deductible -- plus, some costly mistakes to avoid!
How to Deduct Home Office Expenses
If you use a part of your residence for work, you may be able to deduct a portion of your home expenses and depreciation. But here’s the deal: Just doing some paperwork at home on the weekends doesn’t count as having a legitimate home office.
To qualify for this deduction, your home must be your principal office or a place where you meet customers on a regular basis for the convenience of your boss. For complete information, be sure to check out IRS Publication 587, Business Use of Your Home.
How to Deduct Job Search Expenses
The last deduction I mentioned is job-hunting expenses. If you’re looking for a new job, you can deduct many expenses related to your search—even if you haven’t landed a new job yet.
But there’s a catch: You must be looking for a job in your same field. So if you’re trying to make a major career change or you’re hunting for your very first job, those expenses won’t qualify for a deduction.
Some examples of tax-deductible job-hunting expenses include:
- Employment agency fees
- Resume costs and postage
- Travel for interviews
Take a look at IRS Publication 463, Travel, Entertainment, Gift, and Car Expenses for more information.