If you take a year or less off, in order to get education to maintain or
improve your skills, and you subsequently return to the same type of work, your
absence is considered temporary and your work-related education expenses are
deductible, even if you do not return to the same employer.
If you take more than a year off, your absence is indefinite and your
education during that period is considered to qualify you for a new trade or
business, for tax purposes. Your education expenses would not be deductible as
work-related expenses. But you may be eligible for other tax benefits for
education.
Other Tax Benefits for Education
Your work-related education expenses may also qualify for the tuition and
fees deduction, which is an adjustment to gross income on Form 1040, or the
education credits – Hope credit and lifetime learning credit, which would be
direct reductions in your tax. You should see which benefits you qualify for,
and determine which will give you the most tax advantage.
Job Hunting Expenses
You can deduct certain expenses of looking for a job in your present
occupation. Deductible expenses include:
Employment or outplacement
agency fees that you pay
Costs of producing and
sending your resume to prospective employers
Travel and transportation
expenses if you go to an area primarily to look for a job. If the trip is
not primarily to look for a job, you cannot deduct the cost of the trip,
but if you look for a job while you are in the area, you can deduct the
transportation and related expenses you incur while looking for a job in
that area. If you use your own vehicle, you can deduct actual expenses, or
use the standard mileage rate.
Your job hunting expenses are not deductible if:
You are looking for your
first job,
You are looking for a job in
a new occupation, or
There was a substantial break
between the ending date of your last job and the time you started looking
for another job.