We get this one a lot and it is a great question. Unfortunately, the answer is most likely no.
The rules regarding the deductibility of unreimbursed job-related expenses for W-2 employees had changed due to tax law changes. The Tax Cuts and Jobs Act (TCJA), which was passed in 2017, eliminated most miscellaneous itemized deductions, including unreimbursed job-related expenses, for tax years 2018 through 2025. This means that, in general, W-2 employees cannot deduct unreimbursed job-related expenses on their federal income tax returns during this period.
Here are some important points to keep in mind:
- Standard Deduction: Most taxpayers now claim the standard deduction rather than itemizing deductions due to the increased standard deduction amounts under the TCJA. This means that many individual deductions, including job-related expenses, are no longer available.
- Exceptions: There are certain limited exceptions where certain employees may still be able to deduct job-related expenses, such as certain members of the Armed Forces, qualified performing artists, and fee-basis state or local government officials. These exceptions have specific requirements, and it’s essential to consult IRS guidelines or a tax professional for details.
- State Tax Deductions: State tax laws may vary, so it’s possible that some states still allow deductions for job-related expenses. Check with your state’s tax authority or a tax professional for guidance on state-specific rules.
- Reimbursements: If your employer reimburses you for job-related expenses, those reimbursements are typically not considered taxable income, which is a benefit to employees.
It’s important to note that tax laws can change, and deductions and credits may be modified by future legislation. Therefore, it’s advisable to consult a tax professional or check the most recent IRS guidelines and publications for up-to-date information on tax deductions and credits for W-2 employees. Additionally, it’s a good practice to keep accurate records of your expenses, even if they are not currently deductible, as this can help you in the future if tax laws change or your tax situation evolves.