Expenses eligible for income tax deduction in Australia - Are job search expenses allowable deductions?

Question

Following a recent redundancy, I have been looking for another job. Sometimes employers offer outplacement services but in this instance, my former employer did not provide this support.

To assist my job search efforts, I have engaged the services of an outplacement services provider. They are assisting with my job search.

Is the cost of these services a deductible expense or is the cost deemed to be capital in nature?

Answer 1

They are not deductible. They're deemed capital.

Answer 2

It's neither capital nor deductible against income. Under section 8-1 of the tax act you can claim a deduction against ordinary income for an expense that was incurred in the course of earning your income. Not before earning your income. So any expenses related to trying to get a new source of income are incurred too soon to be related to actually earning the income. So you can't claim them. Fullstop. You have to already be earning the income from a job to be able to claim the expenses which relate to it.

Good luck with the job hunting :)