Can I deduct unreimbursed employee expenses on my federal tax return?
For most employees, no.
The Tax Cuts and Jobs Act (TCJA) suspended the federal deduction for most unreimbursed employee business expenses. As a result, employees generally can't deduct out-of-pocket work expenses on their federal return.
A limited group of taxpayers may still qualify to claim certain employee business expenses on Form 2106, Employee Business Expenses, including:
- Armed Forces reservists
- Qualified performing artists
- Fee-basis state or local government officials
- Employees with impairment-related work expenses
Even if you qualify to claim employee business expenses, some costs are specifically nondeductible under federal tax law.
Expenses That Generally Cannot Be Deducted
The following expenses are typically not deductible as unreimbursed employee business expenses:
Personal Commuting Expenses
Driving between your home and your regular workplace is considered commuting and isn't deductible, regardless of distance or work schedule.
Examples include:
- Daily travel between home and work
- Driving to work on weekends or holidays
- Transportation costs for regular work attendance
Personal and Living Expenses
Personal expenses are generally never deductible, even if they're connected to your employment.
Examples include:
- Household expenses
- Family expenses
- Personal clothing suitable for everyday wear
- Residential telephone service
- Home security systems
- Personal disability insurance premiums
Meal and Entertainment Expenses
Most personal meal and entertainment expenses aren't deductible.
Examples include:
- Meals during regular work hours
- Lunches with coworkers
- Meals while working late
- Entertaining friends
- Club dues
- Health club or spa memberships
Entertainment expenses and expenses related to entertainment facilities generally aren't deductible.
Political and Lobbying Expenses
You can't deduct:
- Political contributions
- Campaign donations
- Lobbying expenses
- Costs associated with political activities
Fines and Penalties
Government fines and penalties aren't deductible.
Examples include:
- Parking tickets
- Traffic fines
- Court-imposed penalties
- Other government-issued fines
Personal Legal Expenses
Legal fees related to personal matters generally aren't deductible.
Examples include:
- Divorce-related legal fees
- Personal lawsuits
- Legal matters that don't involve taxable income
Investment-Related Expenses
Many investment-related expenses aren't deductible as employee business expenses.
Examples include:
- Broker commissions on IRA transactions
- Investment seminars
- Certain investment management costs
- Expenses related to producing tax-exempt income
Travel Expenses That Don't Qualify
Not all travel is deductible, even when work is involved.
Examples of nondeductible travel expenses include:
- Travel that serves as a form of education rather than a business purpose
- Employment-related travel expected to last more than one year (unless an exception applies)
- Travel expenses for another individual who doesn't have a legitimate business purpose
- Personal portions of mixed business and vacation trips
Professional and Educational Activities That Aren't Job Related
You generally can't deduct:
- Seminars, conferences, or conventions unrelated to your work
- Educational programs that don't maintain or improve skills required in your current occupation
- Training that qualifies you for a new trade or business
Other Nondeductible Expenses
Additional expenses that generally don't qualify include:
- Adoption expenses (although you may qualify for the Adoption Credit)
- Marriage license fees
- Dog license fees
- Vehicle registration costs that aren't otherwise deductible under specific tax rules
- Check-writing fees
- Relief fund contributions
- Lost or misplaced cash or property
- Certain capital expenditures
Expenses Reimbursed by Your Employer Aren't Deductible
Even if an expense would otherwise qualify, you generally can't deduct any amount that was reimbursed by your employer or paid through an accountable reimbursement plan.
Only unreimbursed expenses may qualify when allowed under Form 2106 rules.
Could My State Allow a Deduction?
While most unreimbursed employee expenses aren't deductible on your federal return, some states still allow deductions for certain employee business expenses.
Additional Information
For additional information, review the IRS instructions for Form 2106, Employee Business Expenses, and IRS Publication 463, Travel, Gift, and Car Expenses.