Key Takeaways
- Unreimbursed employee expenses were once broadly deductible for W-2 employees, but the Tax Cuts and Jobs Act of 2017 suspended the deductions for most workers from 2018 to 2025.
- A select group of workers, including armed forces reservists, performing artists, fee-basis government officials, disabled employees with impairment-related work expenses, and educators, can still deduct certain unreimbursed employee expenses.
- Certain workers must use Form 2106 to calculate deductible unreimbursed employee expenses and report them either as an "above-the-line" deduction on Schedule 1 or as an itemized deduction on Schedule A, depending on their situation.
- The deduction for unreimbursed employee expenses is currently set to be reinstated for all W-2 employees in 2026, but this could change with future congressional action.
Sometimes you might have to dip into your own pocket to buy something you need for work. It could be a uniform, airplane ticket, or special piece of equipment. Or you might have to drive your own car to a conference or other work-related event. If your employer doesn’t pay you back, you might be able to deduct the unreimbursed employee expense on your tax return.
Once upon a time, any worker could deduct a wide variety of unreimbursed employee expenses to the extent they, along with various other miscellaneous itemized deductions, were more than 2% of your adjusted gross income (AGI). However, the Tax Cuts and Jobs Act (TCJA) of 2017 suspended that deduction from 2018 to 2025.
Nevertheless, a handful of workers can still write off certain unreimbursed employee expenses this year. Plus, most of these workers can claim a job-related expense deduction and the Standard Deduction at the same time, which wasn’t allowed for the wider deduction put on hold by the TCJA.
Who can deduct unreimbursed employee expenses?
While most W-2 employees can’t deduct out-of-pocket work expenses anymore, the following workers can still write off certain unreimbursed costs required for their job.
Armed forces reservists. Members of the U.S. Army, Navy, Marine Corps, Air Force, or Coast Guard Reserve; Army National Guard; Air National Guard; and Reserve Corps of the Public Health Service can deduct certain reserve-related travel expenses.
Qualified performing artists. If you’re an actor, musician, or other type of performing artist, you can deduct unreimbursed job-related expenses if you satisfy all of the following requirements:
- You were employed as a performing artist by at least two employers during the tax year.
- You received wages of $200 or more per employer from at least two of those employers.
- You had allowable work-related expenses connected to the performing arts that’s more than 10% of your gross income from the performing arts.
- Your AGI is $16,000 or less before deducting work-related expenses.
If you’re married, you must file a joint return to deduct job-related expenses, unless you didn’t live with your spouse at any point during the tax year.
Fee-basis government officials. You can deduct eligible employee expenses if you’re employed by a state or local government and are compensated, in whole or in part, on a fee basis.
Disabled employees with impairment-related work expenses. This category of workers includes people with physical or mental disabilities. Impairment-related work expenses include the cost of attendant care at your place of employment and other workplace-related expenses that are necessary for you to be able to work.
Educators. K-12 teachers, instructors, counselors, principals, and aides who are in school for at least 900 hours during a school year can also deduct certain job-related expenses.
Also note that self-employed people can deduct their own business expenses on Schedule C (Form 1040). However, this is different from tax write-offs by W-2 employees for their unreimbursed job-related expenses.
What unreimbursed employee expenses are deductible?
Not every job-related expense paid by an employee described above is deductible. For instance, only “ordinary and necessary” expenses can be deducted. According to the IRS, an expense is ordinary if it’s common and accepted in your trade, business, or profession. An expense is necessary if it’s appropriate and helpful to your business, but it doesn't have to be required to be considered necessary.
Plus, even if an expense is “ordinary and necessary,” there may be additional limitations on the amount you can deduct. And, of course, the costs can’t be reimbursed by your employer.
Common employee expenses that typically satisfy the “ordinary and necessary” requirement include (along with related limitations):
- Clothing required for work – If you fall into one of the employee groups listed above, you might be able to deduct uniforms or other clothing that’s required for work and not suitable for wearing outside of work. The cost of cleaning uniforms or work clothes isn’t deductible.
- Education related to your job – Qualified employees may be able to deduct expenses for work-related education, such as tuition, fees, books, related transportation, and the like. However, the education must be (1) to maintain or improve skills needed in your present work, or (2) required by your employer or the law to keep your present salary, status or job. The education can't be part of a program that will qualify you for a new trade or business or that you need to meet the minimal educational requirements of your present trade or business.
- Gifts – If you give a gift to a client and other person you do business with and aren’t reimbursed by your employer, you might be able to deduct the cost of the gift. However, the deduction is generally limited to $25 for each person receiving a gift during the year.
- Meals – The cost of business meals may be deductible if you’re not reimbursed for them. This includes meals while traveling overnight for your job. However, the deduction is generally limited to 50% of meal costs, which is based on either the standard meal allowance or the amount you actually paid for each meal (see IRS Publication 463 for information about the standard meal allowance). Meals costs that aren’t separated from entertainment costs generally can’t be deducted.
- Travel for business – Unreimbursed expenses for lodging and transportation when traveling overnight away from your regular or main place of business might be deductible. This includes the cost of airfare, baggage fees, hotels, car rentals, taxi cabs, tips, and similar travel-related expenses. However, you generally can't deduct travel expenses if you’re away for more than one year.
- Tools used for work – You might be able to deduct the cost of tools used in your work if they wear out and are thrown away within one year from the date of purchase.
- Union dues – A deduction may generally be taken for union dues paid by an eligible worker. However, a deduction isn’t allowed for any portion of union dues used for sick, accident, or death benefits, or for a pension fund.
- Vehicle expenses – If you use your own car or truck at work, you might be able to deduct related expenses that aren’t reimbursed. The deduction is based on either the standard mileage rate or your actual expenses. Parking fees, tolls, and the like are included, but regular commuting expenses aren’t (i.e., for travel between your home and regular workplace).
However, there are also additional restrictions in place for some of the employee groups listed above. As a result, even if you’re a member of one of the listed groups, you still might not be able to deduct an “ordinary and necessary” job-related expense.
For example, reservists can only deduct expenses related to travel as a member of the reserves that’s more than 100 miles from home. The deduction is also limited to the regular federal per diem rate (for lodging, meals, and incidental expenses) and standard mileage rate (for car expenses), plus any parking fees, ferry fees, and tolls.
Disabled employees can only deduct impairment-related work expenses.
And educators can only deduct up to $300 of qualified expenses (2023 and 2024 amount), which include ordinary and necessary expenses paid for either:
- Professional development courses related to the curriculum or students they teach.
- Books, supplies, equipment, and other materials used in the classroom.
TurboTax Tip:
If you’re entitled to reimbursement of an employee expense, make sure you follow your employer’s procedures for being reimbursed. If you don’t seek reimbursement, you can’t deduct the expense.
How to claim a deduction for unreimbursed employee expenses
How you report deductions for unreimbursed employee expenses depends on the type of qualified employee you are.
Reservists, performing artists, and fee-basis government officials must first complete Form 2106 to calculate the deductible amount. The deduction is then reported as an “above-the-line” deduction on Schedule 1 (Form 1040). Since it’s an above-the-line deduction (i.e., reported above the line on your tax return showing your AGI), you can take it whether you claim the Standard Deduction or itemize deductions.
Disabled workers with impairment-related work expenses must also use Form 2106 to calculate their deduction. But their deductions are reported as an itemized deduction on Schedule A (Form 1040). As a result, you can’t claim the deduction for impairment-related expenses if you take the Standard Deduction (since you must choose between the Standard Deduction and itemized deductions).
Teachers and other educators deducting professional development courses or classroom materials don’t have to fill out Form 2106. Instead, they can report their deduction directly on Schedule 1 (Form 1040) as an above-the-line deduction. That means the educator expense deduction can be claimed along with the Standard Deduction.
Also make sure you keep any tax records needed to verify deductions you claim for job-related expenses. If the IRS questions your deduction, you’ll need receipts, pay stubs, canceled checks, bank statements, or other documents to prove you paid for the deductible expenses and weren’t reimbursed for them.
Deducting unreimbursed employee expenses before 2018 and after 2025
Before 2018, all W-2 employees could deduct ordinary and necessary employee expenses that weren’t reimbursed. However, in most cases, the deduction had to be taken as a miscellaneous itemized deduction subject to the 2%-of-AGI rule. That meant you couldn’t take the Standard Deduction if you wanted to claim an employee expense deduction, and the deduction was only available to the extent your miscellaneous itemized deductions were more than 2% of your AGI.
For instance, if your employee expense deduction and other miscellaneous itemized deductions equaled $1,200 and your AGI was $50,000 in 2017, you could only deduct $200. That’s the amount exceeding $1,000, which is 2% of a $50,000 AGI ($50,000 x .02 = $1,000).
Reservists, performing artists, fee-basis government officials, and educators could still deduct eligible employee expenses as an above-the-line deduction instead of as a miscellaneous itemized deduction.
The TCJA provision suspending miscellaneous itemized deductions expires after the 2025 tax year. So, at this time, the deduction for unreimbursed employee expenses is scheduled to be reinstated for all W-2 employees in 2026. But that could change, since Congress is expected to examine the expiring provisions of the TCJA before 2026. Stay tuned as new information becomes available.
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