Job-hunting expenses are deductible

In MSN Money's article, "The top 10 overlooked deductions," number 4 is "Let the IRS subsidize your job search."

Job-hunting expenses are deductible. If you're out of work, or even if you're still employed but looking for a new job, all of your job hunting expenses are deductible as miscellaneous itemized deductions. Such expenses would include resumes, phone calls, postage, travel costs and any other expenses related to your attempt to get a new job. If you’ve done a lot of driving in your job search in 2002, you can deduct mileage for your 2002 return at a rate of 36.5 cents a mile. For 2003, the mileage rate falls to 36 cents a mile.

Creativity here can be rewarding. For example, if you take a friend to lunch in an attempt to use him as a reference or referral, you can use the cost of the lunch as a job-hunting expense.