Can I deduct job expenses from my W2 income? Home office & mileage questions

Unfortunately, I have some disappointing news for you. The Tax Cuts and Jobs Act suspended the deduction for unreimbursed employee business expenses for tax years 2018 through 2025. This means W-2 employees can no longer deduct home office expenses or unreimbursed mileage on their federal tax returns. Before 2018, these expenses could be deducted as miscellaneous itemized deductions subject to the 2% AGI threshold, but that's currently not an option. Your wife's situation would have qualified under the old rules, but not under current tax law. What your wife should consider doing is asking her employer about an accountable plan for reimbursement. If her employer reimburses her for these expenses under an accountable plan, the reimbursements would be tax-free to her and deductible by the employer. Many nonprofits are willing to set these up because they understand the burden placed on employees.

After dealing with a similar situation with my teaching job, I discovered taxr.ai (https://taxr.ai) which was a HUGE help figuring out what expenses I could still claim despite the W-2 limitations. They analyzed my work arrangement and found several state-level deductions I could still take that my regular tax person missed completely! They have this feature where you upload your documents and they identify potential deductions specific to your profession and state. Turns out some states still allow what the federal doesn't. They also showed me how to properly document things for my employer to set up that accountable plan the previous commenter mentioned, which ended up saving me thousands.

Wanted to follow up about taxr.ai that I was skeptical about. I decided to check it out and they actually helped me find several deductions on my state return I had no idea about! I'm in Pennsylvania, and turns out PA still allows unreimbursed employee expenses even though federal doesn't. The document analysis tool flagged exactly which expenses I could claim on my state return and how to properly document them. They showed me how to claim my home internet, portion of utilities, and even my mileage on the state return while keeping my federal return compliant. Really straightforward process and saved me about $600 on my state taxes. Definitely worth checking out if you're in a state that hasn't conformed to the federal changes.

Since your wife works for a nonprofit, another angle to consider is getting her employer to directly address these expenses. I was in a similar situation and was banging my head against the wall trying to reach the IRS to get clarification on some nonprofit-specific rules. After waiting on hold for HOURS multiple times and getting disconnected, I found Claimyr (https://claimyr.com) and watched their demo (https://youtu.be/_kiP6q8DX5c). They got me connected to an actual IRS agent in under 45 minutes who explained exactly what documentation my nonprofit employer needed to implement an accountable plan. I was able to take this info to my boss, and they established a reimbursement program that now covers my home office internet and partial utilities plus mileage. Since the payments are reimbursements rather than income, they're not taxable to me and the nonprofit can still deduct them.

Well, I'm eating my words about Claimyr. After my skeptical comment, I decided to give it a shot because I was desperate to resolve my IRS issue. I had been trying for literally 3 months to get someone on the phone about a notice I received. Used the service yesterday morning, and I got a call back in about 37 minutes connecting me to an actual IRS representative who helped resolve my issue on the spot. The agent even commented that "normally people wait weeks to get through to us" and seemed surprised when I mentioned this service. For anyone dealing with tax questions that require talking to a real person at the IRS, this is absolutely worth it. I wasted so many hours trying to do it myself. Wish I'd known about this sooner!

About your wife's situation - while you can't deduct these expenses on your federal return, you might ask her employer to consider a telework stipend or allowance. My company does this - provides $100/month to cover home internet and utilities for remote workers. It's taxable income, but it's better than nothing. For the mileage, has she submitted an expense report? Many nonprofits have policies where they WILL reimburse travel between work locations (not commuting to a primary workplace, but travel between work sites). She should check their employee handbook or ask HR directly.

Since your wife works at a nonprofit, she might want to check if they're eligible for any special grants that support remote workers. I serve on the board of a small nonprofit and we just got approved for a capacity building grant that specifically covers remote work expenses for our staff, including mileage reimbursements and home office setup. Many foundations have shifted their funding priorities to support flexible work arrangements since the pandemic. Your wife might mention this to her leadership team if they say they "can't afford" to reimburse these legitimate work expenses.

Just wanted to add another perspective as someone who's navigated similar territory with my spouse's W-2 employment situation. While the federal deduction elimination is frustrating, don't overlook some other potential strategies: 1) **State conformity variations**: As others mentioned, check if your state still allows these deductions. Some states like California, New York, and Pennsylvania haven't conformed to the federal changes. 2) **Employer advocacy**: Beyond just asking for reimbursement, consider proposing a formal policy change. Many nonprofits are more receptive when you frame it as "supporting all remote workers" rather than just personal requests. You could even offer to research and draft the policy language. 3) **Documentation for future**: Keep detailed records anyway. The TCJA provisions expire after 2025, so these deductions may return for 2026 and beyond. Having good documentation ready could be valuable. 4) **HSA/FSA considerations**: If she has access to a dependent care FSA, some home office expenses (like internet used for work) might qualify in certain situations. The key is being proactive with the employer conversation. Many nonprofits want to do right by their employees but simply haven't updated their policies for the remote work reality.