For the most part, no — a regular W-2 employee cannot write off business expenses on a federal tax return. The deduction for unreimbursed employee expenses was suspended by the Tax Cuts and Jobs Act starting in 2018, and the One, Big, Beautiful Bill Act signed in July 2025 made that suspension permanent.1Congress.gov. H.R.1 – 119th Congress (2025-2026) – Section 70110 A few narrow categories of workers still qualify, and employer reimbursement plans remain the main way to get tax-free treatment for costs you pay out of pocket for your job.
Why the Deduction Is Gone for Most W-2 Employees
Before 2018, employees who itemized could deduct unreimbursed job expenses as miscellaneous itemized deductions, but only the portion exceeding 2% of adjusted gross income. The TCJA suspended that entire category for tax years 2018 through 2025, and the sunset would have brought it back for 2026.2Office of the Law Revision Counsel. 26 USC 67 – 2-Percent Floor on Miscellaneous Itemized Deductions
That reversal didn’t happen. Section 70110 of the One, Big, Beautiful Bill Act struck the sunset date, and the statute now reads that “no miscellaneous itemized deduction shall be allowed for any taxable year beginning after December 31, 2017,” with no end date.3Office of the Law Revision Counsel. 26 U.S. Code 67 – 2-Percent Floor on Miscellaneous Itemized Deductions
The practical effect: if you’re a typical W-2 employee paying for tools, professional dues, required training, home office costs, or business travel out of your own pocket, none of it produces a federal tax benefit. It doesn’t matter how necessary the cost was or whether your employer refused to reimburse you. Some older tax guides and preparers still describe this as a temporary suspension. Anything published before mid-2025 on this topic is out of date.
Employees Who Can Still Deduct Business Expenses
The suspension carves out several groups whose deductions are written directly into the tax code. If you fall into one of these, you file Form 2106 (or in one case, Schedule C) rather than trying to use the general miscellaneous itemized deduction.4IRS. 2025 Instructions for Form 2106 – Employee Business Expenses
Armed Forces Reservists
If you’re a reservist who travels more than 100 miles from home and stays overnight for drills or reserve meetings, your unreimbursed travel costs come off as an above-the-line adjustment to income.5Internal Revenue Service. Military Adjustments to Income Workout Above-the-line means you get the deduction whether or not you itemize. The amount is capped at the federal per diem rates for lodging and meals, plus the standard mileage rate.
Qualified Performing Artists
Performing artists get an above-the-line deduction too, but the qualifying rules are strict. You have to meet all three:6Office of the Law Revision Counsel. 26 USC 62 – Adjusted Gross Income Defined
- You performed services in the performing arts as an employee for at least two employers during the tax year, and each paid you at least $200.
- Your allowable performing-arts business deductions exceeded 10% of your gross income from that work.
- Your AGI before this deduction was $16,000 or less.
The $16,000 AGI ceiling makes this a very small door. On a joint return, each spouse has to independently meet the first two tests, and the $16,000 cap applies to combined income; joint filing is generally required.7Internal Revenue Service. Publication 463 (2025), Travel, Gift, and Car Expenses – Section: Expenses of Certain Performing Artists
Fee-Basis State or Local Government Officials
State and local officials who are paid in whole or in part on a fee basis, rather than a salary, can deduct their work expenses above the line.8Office of the Law Revision Counsel. 26 USC 62 – Adjusted Gross Income Defined This typically covers roles like justices of the peace, notaries, and some county clerks.
Employees With Impairment-Related Work Expenses
If you have a physical or mental disability and pay for attendant care at work or other impairment-related expenses that let you do your job, those costs remain deductible. The statute specifically exempts impairment-related work expenses from the miscellaneous deduction suspension.9Office of the Law Revision Counsel. 26 USC 67 – 2-Percent Floor on Miscellaneous Itemized Deductions
Statutory Employees
Check Box 13 on your W-2. If “Statutory employee” is marked, you’re outside the miscellaneous deduction rules entirely: you report your income and expenses on Schedule C, the same as a self-employed person.10Internal Revenue Service. Statutory Employees Social Security and Medicare taxes are already withheld from your pay, so you don’t owe self-employment tax on that income.11Internal Revenue Service. Instructions for Schedule C (Form 1040) (2025) The four statutory employee categories are:
- Agent or commission drivers distributing beverages (other than milk), meat, produce, or bakery products, or picking up and delivering laundry or dry cleaning.
- Full-time life insurance salespeople whose principal business is selling life insurance or annuity contracts, primarily for one company.
- Home workers using materials the employer supplies and must have returned, following the employer’s specifications.
- Full-time traveling salespeople turning in orders from wholesalers, retailers, or similar businesses, where the work is their principal activity.
Eligible K-12 Educators
Teachers and certain other educators have long had a separate above-the-line deduction for classroom supplies, capped at $300 per qualifying educator for 2026.12Internal Revenue Service. Topic No. 458, Educator Expense Deduction The One, Big, Beautiful Bill Act added a second layer starting in tax year 2026: a separate itemized deduction for educator expenses with no dollar cap and no 2% AGI floor.1Congress.gov. H.R.1 – 119th Congress (2025-2026) – Section 70110 It also broadened eligibility to include interscholastic sports coaches and administrators, removed the exclusion of athletic supplies, and replaced “in the classroom” with “instructional activity.” The itemized portion only helps if your total itemized deductions exceed the 2026 standard deduction of $16,100 for single filers or $32,200 for married joint filers.13Internal Revenue Service. IRS Releases Tax Inflation Adjustments for Tax Year 2026, Including Amendments From the One, Big, Beautiful Bill
What to Do Instead: Employer Reimbursement
For everyone else, the path to tax-advantaged treatment of job expenses runs through your employer. How the IRS treats a reimbursement depends on whether the employer’s plan is an accountable plan or not.
Accountable Plans Keep the Money Tax-Free
Reimbursements under an accountable plan don’t count as wages. They don’t appear in Box 1 of your W-2, no income tax is withheld, and no payroll taxes come out. To qualify, the plan must meet all three of these requirements:14Internal Revenue Service. Publication 15 (2026), (Circular E), Employer’s Tax Guide
- Business connection. The expense has to be one you incurred performing services as an employee, not disguised extra pay.
- Substantiation. You document the expense to your employer with records of amount, date, place, and business purpose. The IRS treats within 60 days after the expense as reasonable.
- Return of excess. If the employer advanced or paid more than what you substantiated, you return the difference. The IRS considers 120 days after the expense a reasonable deadline.
If a plan skips substantiation or lets you keep overpayments, it fails the accountable plan test. Any amount not properly substantiated or returned gets reclassified as taxable wages for the first payroll period after the reasonable deadline passes.
Non-Accountable Plans Are Taxed as Wages
Any reimbursement arrangement that misses even one of the three requirements is non-accountable. Payments go into your taxable wages, your employer withholds income tax and payroll taxes on them, and — because the employee deduction no longer exists — you cannot offset the taxable reimbursement with the expenses it was meant to cover. You end up paying tax on money that was supposed to make you whole. If your employer offers any kind of expense reimbursement, it’s worth confirming that the plan actually meets the accountable plan requirements.
Mileage on a Personal Vehicle
The IRS standard mileage rate for business use in 2026 is 72.5 cents per mile.15IRS. Standard Mileage Rates Employers on an accountable plan often reimburse at or near that rate. Reimburse below the rate and the shortfall is simply an out-of-pocket cost with no deduction. Reimburse above it and you have to return the excess, or the overage becomes taxable wages.
Commuting Doesn’t Count
Even back when employee business deductions existed, the drive from home to your regular workplace was never one of them. Commuting is a personal expense regardless of distance or whether you take work calls in the car.16Internal Revenue Service. Publication 463 (2025), Travel, Gift, and Car Expenses Travel between two workplaces on the same day is different, and so is travel from home to a temporary job site when you also have a regular workplace; both are deductible transportation for the workers who still qualify for a deduction at all.
Penalty Risk If You Claim It Anyway
Some taxpayers still try to write off employee expenses on their federal return, often because they followed outdated advice. The IRS runs automated filters against Form 2106 filings from workers outside the exempt categories. Claiming miscellaneous itemized deductions you’re not entitled to can trigger the accuracy-related penalty of 20% of the resulting tax underpayment, on top of the tax and interest.17Internal Revenue Service. Accuracy-Related Penalty The penalty applies to underpayments from negligence or disregard of the rules.
Your State Return May Be Different
The federal suspension doesn’t control your state income tax. Several states never conformed to the TCJA change and still follow the pre-2018 federal rules, allowing unreimbursed employee business expenses as an itemized deduction subject to the older 2% AGI floor. Which states conform shifts as legislatures update their codes, so check your state’s current instructions before assuming either way. If your state does allow it, you’ll generally calculate the deduction using the same expense categories and substantiation rules that applied under the old federal system, and keep your receipts accordingly.