Whether you work in an office, remotely from home, or run a small business, claiming work expenses is one of the best ways to lower your taxable income. But with changing IRS rules—especially since the 2017 Tax Cuts and Jobs Act—it’s important to know what expenses still qualify and how to properly claim them.
This guide explains which deductions are still valid, who qualifies, what documentation to keep, and how to stay IRS-compliant. For a breakdown of what’s considered personal versus business, see which medical expenses are tax deductible.
Who Can Claim Work-Related Tax Deductions?
If you’re self-employed, run a side hustle, or operate as an independent contractor, you’re still allowed to deduct a wide range of job-related business expenses using Schedule C (Form 1040).
However, if you’re a W-2 employee, the rules have changed. The 2017 tax law eliminated unreimbursed employee expense deductions for most workers until at least 2026. There are a few exceptions, such as:
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Armed Forces reservists
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Qualified performing artists
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Fee-based government officials
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Teachers (eligible for up to $300 educator expense deduction)
Work-related deductions don’t affect credits like the child tax credit, which is calculated separately based on your income and dependents. If you’re unsure whether you qualify, speak with a professional at Del Real Tax Group. For full IRS guidance, see their official guide to business expense deductions.
15 Common Work Expense Tax Deductions for Self-Employed Filers
Below are the most common deductions that freelancers, contractors, and small business owners may claim:
1. Business Meals
You can deduct 50% of the cost of meals with clients, vendors, or while traveling for business. Keep receipts showing the date, location, business relationship, and purpose.
2. Work-Related Travel
Airfare, hotel, rental car, parking, tolls, and business-related mileage are deductible. Meals while traveling are also 50% deductible. You can use the standard mileage rate or track actual vehicle expenses.
3. Business Insurance
Premiums for general liability, professional liability, cyber insurance, and business property insurance can be deducted. If you have a home office, a portion of renters or homeowners insurance may also be included.
4. Business Loan Interest
If you took out a loan for business purposes, you can deduct the interest. You must be able to prove the loan was used solely for business expenses.
5. Home Office Expenses
If you use part of your home exclusively and regularly for business, you can deduct a portion of rent, utilities, insurance, and internet. If you don’t use the simplified home office method, you must calculate actual expenses such as rent, utilities, and internet and prorate them based on business use.
6. Office Supplies
From paper and pens to laptops and printers, most supplies and equipment directly used in your business are 100% deductible.
7. Professional Services
Fees paid to accountants, tax preparers, legal advisors, consultants, or marketing agencies are deductible.
8. Continuing Education
Courses, webinars, certifications, and licenses that help you maintain or improve your skills in your current business can be deducted.
9. Employee Salaries and Benefits
If you employ others, salaries, vacation pay, and benefits like health insurance and retirement matches are deductible. The employee must not be a partner or shareholder.
10. Charitable Contributions
If your business is a corporation, charitable donations can be claimed on the corporate return. Sole proprietors and LLCs must claim these on their personal return.
11. Energy Efficiency Upgrades
You may qualify for tax credits or deductions when making eco-friendly upgrades to your commercial property. Check eligibility for IRS energy credits.
12. Real Estate Taxes
If you own property used for business, local real estate taxes may be deductible. The deduction is subject to the $10,000 SALT cap.
13. Mortgage Interest
If your home or property is used for business, a portion of the mortgage interest may qualify.
14. Client & Employee Entertainment
Entertainment expenses are no longer broadly deductible, but exceptions exist for business meals and events with a clear business purpose. The event must involve active business discussion.
15. Advertising and Marketing
This includes digital ads, website hosting, graphic design, social media campaigns, and traditional print ads.
Want to explore even more eligible write-offs? See our guide to tax deductions every business owner should know.
What’s 100% vs. 50% Deductible?
Not all work-related expenses are treated equally in the eyes of the IRS. Some costs are considered fully deductible, while others only qualify for partial deduction. For example, expenses like office supplies, marketing costs, software subscriptions, legal and accounting fees, and internet used exclusively for business are generally 100% deductible. In contrast, meals for business purposes and meals while traveling are only 50% deductible. These partial deductions exist because the IRS views them as having both business and personal benefit. It’s critical to categorize expenses correctly and keep documentation to support the business purpose of each deduction. Accurately applying these deductions can significantly reduce your tax bill, especially for self-employed individuals with high operating costs.
What Work Expenses Are Not Deductible?
While many expenses may feel job-related, the IRS excludes several categories that are either personal in nature or not directly tied to your business operations. Claiming these can lead to audit risk and disallowed deductions. The most common nondeductible expenses include:
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Commuting costs between your home and your regular workplace
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Clothing that can be worn outside of work, even if it’s part of your daily attire
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Phone or internet bills without clear documentation of business-use percentage
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Expenses that were reimbursed by your employer or client
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Meals that are not directly tied to client meetings or travel
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Supplies or subscriptions used mainly for personal benefit
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Client entertainment, such as sporting events or social outings (no longer deductible under current IRS rules)
Only unreimbursed expenses are eligible—if your employer or client already covered the cost, you can’t deduct it again.
How to Claim Work Expenses on Your Taxes
Claiming work-related deductions correctly depends on your employment status. If you’re self-employed, you’ll report your business income and deduct expenses using Schedule C with your Form 1040. If you operate a corporation or partnership, different tax forms may apply. W-2 employees, on the other hand, generally cannot deduct job expenses unless they fall under a narrow list of IRS exceptions. To stay compliant, it’s important to follow IRS guidelines and maintain proof of all deductions you claim. Not sure who to talk to about filing correctly? Here’s how to choose the right tax professional.
Remember, some deductions can only be applied if they exceed a percentage of your adjusted gross income (AGI), so knowing your AGI is crucial before itemizing. Note: some deductions, like the student loan interest deduction, also reduce your AGI, which can indirectly affect your eligibility for itemized work-related write-offs. You can go through this process, and if you find that the standardized amount is higher, you can choose to use the flat rate. Learn more about the standard deduction here.
Here’s how to properly claim your work expenses:
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Self-employed individuals: Use Schedule C with Form 1040
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Corporations or partnerships: Use Form 1120 or 1120-S
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Eligible employees: Use Schedule A (Itemized Deductions), if applicable
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Home office deduction: Use Form 8829 or simplified square-footage method
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Use accurate bookkeeping: Maintain consistent records and categorize expenses clearly
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Don’t forget supporting documentation: Keep receipts, mileage logs, invoices, and notes on business purpose
What Records Should You Keep?
Keeping organized and detailed records is one of the most important steps in successfully claiming your work-related deductions. In the event of an IRS audit, you’ll be expected to provide proof that your expenses were legitimate, necessary, and directly related to your business. Digital or physical copies are both acceptable—as long as they’re legible and clearly identify the expense.
Here are the key records you should keep:
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Receipts and invoices showing dates, amounts, and business purpose
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Mileage logs for business-related vehicle use
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Bank and credit card statements that match your claimed expenses
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Canceled checks or proof of payment
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Contracts, client agreements, or statements of work
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Home office square footage documentation (if applicable)
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Proof of business-use percentage for shared services like phone or internet
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Any written notes or calendar entries that support the context of the deduction
FAQs About Work-Related Tax Deductions
Q: Can I deduct work-from-home expenses as a W-2 employee?
A: No, unless you’re in one of the few exempt categories (e.g. military reservists, performing artists). This was removed by the 2017 tax law.
Q: What’s the difference between a business and personal expense?
A: Business expenses must be both “ordinary and necessary” for your trade. If it’s something you’d buy anyway for personal use, it likely isn’t deductible.
Q: Can I deduct my phone bill?
A: Yes, if it’s a separate business phone. For personal phones used partially for business, only the business-use percentage is deductible.
Q: What if I have a side hustle and a full-time job?
A: You can claim business expenses from your side gig on Schedule C, even if you’re also a W-2 employee.
Q: Do I need to keep physical receipts?
A: Not necessarily. Digital receipts are fine as long as they clearly show the vendor, date, and amount.
Need Help Navigating Work Deductions?
Whether you’re self-employed, running a side hustle, or just want to understand what qualifies, Del Real Tax Group is here to help. Our experienced CPAs and Certified Tax Coaches specialize in helping small businesses and freelancers maximize deductions and stay IRS-compliant. Contact us today or call 708-788-0082 to schedule a personalized consultation. Let Del Real Tax Group help you prepare a compliant, optimized tax return that reflects every deduction you’re entitled to.
