Can You Deduct Work-Related Expenses as a W-2 Employee?

(Tax Year 2024 – Filed in 2025)

Overview

If you’re a W-2 employee, you might wonder whether you can deduct job-related expenses like travel, home office costs, uniforms, or supplies. While these were once deductible for many, the Tax Cuts and Jobs Act (TCJA) of 2017 changed the rules significantly.

For tax years 2018 through 2025, most W-2 employees cannot deduct unreimbursed employee expenses on their federal return. However, there are a few specific exceptions, and some deductions may still apply at the state level or under special job categories.

Who Cannot Deduct Work Expenses (Most W-2 Employees)

Under current federal law:

• Unreimbursed employee expenses are no longer deductible for most W-2 earners
• The miscellaneous itemized deduction category (2% rule) was suspended through 2025
• This applies even if you use your own money for job-related tools, travel, or home office

Who Can Still Deduct Work Expenses? (Special Categories)

The IRS allows deductions for job-related expenses if you belong to one of the following categories:

1. Armed Forces Reservists

• Can deduct unreimbursed travel expenses
• Must travel more than 100 miles from home to fulfill duties
• Report on Form 2106

2. Qualified Performing Artists

• Must meet specific income thresholds and job conditions
• Eligible to deduct expenses like agent fees and costumes
• Report on Form 2106

3. Fee-Basis Government Officials

• Includes public officials paid on a per-service basis
• May deduct unreimbursed job expenses

4. Employees With Impairment-Related Work Expenses

• If you have a disability and incur job-related expenses, you may still deduct them

What About Home Office Deductions?

If you are a W-2 employee working remotely:

• You cannot deduct home office expenses unless you are in one of the categories above
• Only self-employed individuals may deduct home office costs on Schedule C

State-Level Deductions

Some states still allow work expense deductions for W-2 employees. This varies by state, but examples include:

• California
• New York
• Minnesota
• Pennsylvania

Check your state’s tax rules or consult a CPA for specifics.

Example Scenario

Neha is a W-2 employee who works from home full-time and buys her own computer equipment and supplies. She is not a reservist or performing artist. Although these are necessary for her job, she cannot deduct these expenses on her federal return under current law.

However, if she lives in California, she may be eligible to deduct them on her state tax return.

What You Can Do Instead

• Request employer reimbursement through an accountable plan
• Track state tax deductions that still allow unreimbursed expenses
• Contribute to pre-tax benefits like FSA or commuter benefits where possible
• If you have a side business, you may deduct work-related expenses on Schedule C

Conclusion

Most W-2 employees cannot deduct work-related expenses on their federal tax return for 2024, unless they fall under a special category like a reservist or performing artist. However, options still exist at the state level or through reimbursement plans. Know your category, and speak with a tax advisor to explore available strategies.

Call to Action

Not sure whether you qualify to deduct job-related expenses? Schedule a meeting with Anshul Goyal, CPA EA FCA. He will review your situation, including federal and state rules, to ensure you’re maximizing any legal deductions available to you.

Top 5 FAQs: Work-Related Deductions for W-2 Employees

Can W-2 employees deduct job expenses in 2025?
Not at the federal level, unless they fall under specific exceptions (e.g., reservists, performing artists).

Can I deduct home office expenses if I’m a W-2 employee?
No, unless you qualify under a limited exception category.

What IRS form is used for work-related expenses?
Form 2106 is used for eligible groups such as reservists or performing artists.

Are job expenses deductible in my state?
Some states still allow them. You’ll need to review your specific state’s tax laws.

What can I do instead of deducting these expenses?
Use employer reimbursement plans or contribute to pre-tax employee benefit programs.

About Our CPA

Anshul Goyal, CPA EA FCA is a Certified Public Accountant licensed in the U.S. and an IRS-authorized Enrolled Agent. He helps W-2 employees, business owners, and Indian professionals in the U.S. understand what they can and cannot deduct, ensuring accurate and compliant tax filings.

Schedule a meeting with Anshul here:
https://calendly.com/anshulcpa/

Disclaimer

This article is for informational purposes only and does not constitute legal or tax advice. Always consult a qualified CPA for advice tailored to your situation.