Job expenses are the ordinary and necessary costs you pay out of your own pocket to do your work: tools, travel, uniforms, licenses, and the like. For most W-2 employees, those costs are no longer deductible on a federal tax return, so recovering them now depends mainly on employer reimbursement and, in some places, state law. Self-employed workers still deduct their business expenses in full.
What Counts as a Job Expense
The IRS defines a legitimate business expense as one that is both ordinary (common in your industry) and necessary (helpful and appropriate for your work).1Cornell Law School / Legal Information Institute (LII). Deductible Business Expense For employees, these costs tend to fall into a few recurring buckets.
Travel and transportation are usually the biggest. If you drive your own car for work, the IRS sets a standard mileage rate each year; for 2026, it is 72.5 cents per mile.2Internal Revenue Service. 2026 Standard Mileage Rates Parking, tolls, and work-related airfare count as well. Commuting between home and your regular workplace does not.
Then come tools, equipment, and technology: a carpenter’s power tools, a photographer’s editing software, a nurse’s required certification course. Work clothing qualifies only when the employer requires it and it isn’t suitable for everyday wear. A branded uniform or safety gear counts; a suit or plain scrubs generally do not.
Professional fees round things out. Union dues, license renewals, and mandatory continuing education can quietly add up to hundreds or thousands of dollars a year.
Can W-2 Employees Deduct Job Expenses on Federal Taxes
Generally, no. The Tax Cuts and Jobs Act suspended the miscellaneous itemized deduction for unreimbursed employee expenses starting in 2018, and in mid-2025 Congress removed the sunset date, making the suspension permanent.3Office of the Law Revision Counsel. 26 USC 67 – 2-Percent Floor on Miscellaneous Itemized Deductions There is no longer a scheduled return of the deduction in a future tax year.
The practical effect: if you are a regular W-2 employee, you cannot reduce your federal taxable income by claiming the cost of tools, travel, uniforms, union dues, or any other unreimbursed work expense, whether or not your employer required the purchase. Form 2106 is now limited to a handful of narrow exceptions.4IRS. 2025 Instructions for Form 2106 Employee Business Expenses
Who Can Still Deduct Employee Expenses
Three groups of employees may still file Form 2106 and deduct qualifying expenses as an adjustment to gross income, meaning the benefit applies whether or not they itemize: Armed Forces reservists traveling more than 100 miles from home for reserve service, qualified performing artists who meet specific income and employment thresholds, and fee-basis state or local government officials. Employees with impairment-related work expenses can also use Form 2106, though their deduction goes on Schedule A rather than reducing adjusted gross income directly.4IRS. 2025 Instructions for Form 2106 Employee Business Expenses
The performing-artist qualifications are strict. You must have worked for at least two performing arts employers during the year, earned at least $200 from each, had business expenses exceeding 10% of your performing arts income, and had adjusted gross income of $16,000 or less before the deduction.4IRS. 2025 Instructions for Form 2106 Employee Business Expenses Most working performers do not meet all four.
The Educator Expense Deduction
Teachers, counselors, principals, and classroom aides in kindergarten through grade 12 can deduct up to $300 per person for unreimbursed classroom supplies, books, computer equipment, and professional development.5Internal Revenue Service. Topic No. 458, Educator Expense Deduction You must work at least 900 hours during the school year to qualify.6Office of the Law Revision Counsel. 26 USC 62 – Adjusted Gross Income Defined The deduction is above the line, so it lowers adjusted gross income without itemizing. If both spouses are eligible educators filing jointly, each can claim up to $300, for a combined $600.
Self-Employed Workers and Contractors
The permanent suspension does not touch self-employed workers. If you file as a sole proprietor, freelancer, or independent contractor, your ordinary and necessary business expenses remain fully deductible against your business income on Schedule C.7Internal Revenue Service. Instructions for Schedule C (Form 1040) (2025) Statutory employees such as certain driver-salespersons, life insurance agents, and home workers also report expenses on Schedule C. Subtracting expenses from gross receipts reduces both regular income tax and self-employment tax.
The home office deduction is available if you use part of your home exclusively and regularly for business. The simplified method pays $5 per square foot, capped at 300 square feet, for a maximum of $1,500.8Internal Revenue Service. Simplified Option for Home Office Deduction You can instead calculate actual expenses (a proportional share of rent, utilities, insurance, and depreciation), which sometimes yields more but requires better records. Marketing, website hosting, professional subscriptions, and business insurance are also commonly deductible.
The core difference from W-2 employment is that a self-employed worker is taxed only on net profit. Every legitimate business expense directly reduces what you owe.
Getting Reimbursed by Your Employer
With the federal deduction closed for most employees, employer reimbursement is often the only way to keep from absorbing job costs. How the plan is structured determines how the money is taxed.
Accountable Plans
Reimbursements paid under an accountable plan are not included in your taxable wages and do not appear on your W-2. To qualify, the plan must meet three requirements: the expense has a business connection to your work, you substantiate the expense with receipts or similar documentation, and you return any excess reimbursement within a reasonable time.9eCFR. 26 CFR 1.62-2 – Reimbursements and Other Expense Allowance Arrangements A flat monthly stipend with no requirement to account for spending does not qualify.
Non-Accountable Plans
If any of those three requirements is missing, the IRS treats the whole arrangement as non-accountable. Every dollar is added to your gross income, reported as wages on your W-2, and subjected to income tax withholding and payroll taxes.9eCFR. 26 CFR 1.62-2 – Reimbursements and Other Expense Allowance Arrangements You still come out ahead of getting nothing, but the tax hit reduces the real value of the reimbursement.
Federal Wage Protection When Costs Eat Into Pay
Under the Fair Labor Standards Act, an employer cannot require you to pay for tools or equipment that are primarily for the employer’s benefit if doing so drops your effective pay below the federal minimum wage or cuts into overtime you’ve earned.10eCFR. 29 CFR 531.35 – Free and Clear Payment; Kickbacks This matters most for lower-wage workers: a restaurant requiring servers to buy their own aprons, a warehouse making new hires buy steel-toed boots, or a cleaning company charging employees for supplies can all run afoul of the rule when workers earn close to the minimum wage. The employer does not have to reimburse the full cost in every case, but the expense cannot erode the wages the law guarantees.
State Laws That Require Reimbursement
Federal tax law may have closed the deduction door, but roughly a dozen states and localities require employers to reimburse necessary business expenses. These protections exist independently of the tax code and give workers a direct legal claim.
The stronger state laws require employers to cover all necessary expenses a worker incurs as a direct result of doing the job. That typically includes tools, required training, business travel, uniforms, and personal devices used for work. Many of these states impose a submission deadline (30 days is common) for the employee to file a request with documentation. Employers can adopt a written reimbursement policy with reasonable specifications, but they cannot adopt a policy of no reimbursement or token amounts.
If an employer fails to reimburse required expenses in a state with these protections, the worker can file a claim and potentially recover the unpaid amount plus interest and attorney fees. Penalties vary. Some states allow recovery of the amount owed with interest; others impose liquidated damages that can double the original expense.
Remote Work Costs
Several states with broad reimbursement statutes have applied their existing rules to home internet service, personal cell phone usage for work calls and texts, and other work-from-home costs. In those places, if your employer requires you to use your personal phone or home internet for work, a reasonable share of the monthly bill is reimbursable. In states without these protections, there is no legal right to reimbursement for remote work costs, and the terms of your employment agreement are the only fallback.
Records That Hold Up
Whether you are deducting on Schedule C, filing under one of the employee exceptions, or submitting a reimbursement request, your records decide whether the claim survives. The IRS wants four elements for every business expense: the amount, the time or date, the place, and the business purpose.11Office of the Law Revision Counsel. 26 USC 274 – Disallowance of Certain Entertainment, Etc., Expenses
For travel, record when you left and returned, where you went, and why the trip was necessary. For mileage, log the date, destination, business purpose, and odometer readings. Restaurant receipts should show the name and location of the restaurant, the date, and the amount.12Internal Revenue Service. Publication 463 (2025), Travel, Gift, and Car Expenses A credit card statement alone usually will not do, because it lacks the detail the IRS wants.
Record expenses as they happen. A note typed into your phone at the end of a business dinner takes ten seconds and can save a deduction years later during an audit. For state reimbursement claims, keep copies of your submission and any employer response. If a dispute reaches a labor agency or court, the paper trail is what wins.