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According to IRS pub 529, it is permissible to deduct some job search expenses, such as recruiter fees, resume preparation, and travel.

I'm curious about the resume preparation in particular. Does that include a resume that I prepared myself, or does it only apply to professional resume services? E.g. I created my own resume and spent time e-mailing it to employers. Can I deduct the cost of my time? And if so, how would I compute that cost?

Edit: To clarify, my job search was for a new job in my existing occupation. I was not unemployed or changing occupations.

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You cannot deduct the cost of your time because you didn't pay any money to deduct. Since you're unemployed, you cannot claim lost wages (even if you could - you wouldn't be able to deduct that), so your time is a non-deductible expense. Note that in the instructions they say it very clearly:

You can deduct amounts you spend for preparing and mailing copies of a résumé to prospective employers if you are looking for a new job in your present occupation.

Note that the job search must be in your present occupation, and it is only above the 2% limit (i.e.: you can only deduct what you've spent in excess of 2% of your AGI).

Generally you would put travel for interviews in this item, if you had to spend your own money for flights, and even that it might require some explanation in case of an audit (you'll need to substantiate the trip and show that it was for an interview, and not for pleasure with an interview as an excuse, and substantiate all the amounts).

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Sorry I wasn't clear in my question; I was not unemployed and I was looking for a new job in my present occupation. So I do have taxable earnings to deduct from, and I plan to itemize deductions this year. I am mainly interested in the resume deduction, since I definitely did not have significant travel expenses for my job search. –  mehaase Apr 26 '12 at 14:40
    
@mehaase as I said - you can only deduct money actually spent, and only the portion that's above 2% of your AGI. Resume preparation costs just won't cut it for anyone employeed, it will be below 2%. –  littleadv Apr 26 '12 at 17:01
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