Question: Let us say that for 2002, I spent $3,000 searching for a job, without success. Where would I deduct my search costs? -- D.N., Newtown, Conn.

D.N.: Your job-search expenses go on Schedule A of Form 1040 under miscellaneous itemized deductions. These types of deductions are subject to various limits. For example, you can claim only the amount of miscellaneous deductions that exceeds 2% of your adjusted gross income.

Next, there are several important restrictions on job-search costs. For starters, you can deduct certain expenses only if you're looking for a new job in your "present occupation," the IRS says. For example, if you're a high-school English teacher, you can't deduct your expenses searching for a job as a carpenter.

The IRS also says you can't deduct your expenses if you're looking for a job for the first time. But a student "may be able to avoid this restriction by working during his or her senior year," says Martin Nissenbaum of Ernst & Young in New York. In addition, you can't deduct job-search expenses if there was "a substantial break" between the end of your last job and your search for a new one. The IRS doesn't explain what it means by "a substantial break." That's why tax advisers routinely tell clients to make sure they launch their search as soon as possible after leaving a job and to continue the search on a regular basis. Also be sure to keep good records in case you're audited.

Here's another point some people may not be aware of: You can deduct your expenses even if you don't land a new job -- and even if you don't accept a job that's offered to you, says Mr. Nissenbaum. Among the expenses that may be deductible are employment and outplacement agency fees, resume costs and travel and transportation costs. See IRS Publication 17 for details.