Ask an Accountant

As a W2 employee, this is unfortunately tough news: since the 2017 Tax Cuts and Jobs Act, unreimbursed employee business expenses are no longer deductible on your federal return. That means the courses, books, supplies, and licensing costs you pay out of pocket cannot be written off federally, even if your employer doesn't reimburse you.

This applies regardless of your profession, so therapists, teachers, and other W2 workers are all in the same boat until the law changes.

A couple of things worth knowing, though. Some states still allow unreimbursed employee expense deductions on your state return. California, New York, and a handful of others kept their own versions of this deduction. So depending on where you live, you may still get some benefit at the state level.

Also, if you ever do any independent contractor or side therapy work outside your W2 job, those expenses become fully deductible against that self-employment income. Even one or two private clients would open the door to deducting continuing education, books, and supplies proportionate to that work.

One more thing worth mentioning to your employer: if the practice were to set up an accountable plan to reimburse your expenses, that money would be tax-free to you and deductible for them. It's a win on both sides and something a lot of small practices don't realize they can do easily.