Updated June 2026 · 9 min read
Most nurses overpay their taxes by $400–$1,200 per year by missing deductions they're legally entitled to. Here's what's actually deductible and what isn't.
As a W-2 employee, unreimbursed employee business expenses (scrubs, stethoscopes, CEUs) are NOT deductible at the federal level under current tax law (the Tax Cuts and Jobs Act eliminated miscellaneous itemized deductions). This changed in 2018 and remains in effect through 2025 — and has been extended further under current legislation. Some states still allow these deductions on state returns — check your state.
What W-2 nurses CAN deduct (via itemizing, if total exceeds standard deduction):
| Deduction | Notes |
|---|---|
| State and local income taxes paid | Capped at $10,000 combined (SALT cap) |
| Mortgage interest | On primary + one secondary residence, up to $750k loan |
| Charitable contributions | Cash + non-cash, with receipts |
| Medical expenses exceeding 7.5% AGI | High threshold — usually only helpful in catastrophic years |
| Student loan interest | Up to $2,500, phases out above $75k income (single) |
If you have any self-employment income — per diem shifts through a staffing agency where you receive a 1099, consulting, education work, side income — those deductions live on Schedule C and are much broader:
| Deductible Expense | What Qualifies |
|---|---|
| Scrubs and medical clothing | Uniforms required for work and not suitable for everyday wear |
| Stethoscope, BP cuff, equipment | Professional tools purchased for work |
| License renewal fees | RN license, APRN, state renewal fees |
| Certification exam fees | CCRN, BLS, ACLS, other professional certifications |
| Continuing education | CEUs required to maintain license; conferences |
| Professional organization dues | AACN, ANA, specialty nursing associations |
| Malpractice insurance (personal policy) | Not employer-provided; personal professional liability |
| Home office | If you have a dedicated space used regularly and exclusively for work |
| Phone and internet | Business-use percentage only |
| Travel to work locations | Mileage between job sites; NOT commute from home to primary job |
Travel nurses on Schedule C (1099 contractors) can deduct a broader range of work-related expenses. But the more important tax advantage for travel nurses is the non-taxable stipend structure — which is worth far more than any individual deduction. A $1,200/week housing stipend tax-free saves approximately $264–$444/week in taxes depending on bracket. No deduction comes close to that value.
Travel nurses should track: licensing fees for each state they work in (each new state license is deductible), professional travel to required orientations or training, agency-required CEUs, and any equipment purchased specifically for clinical work on assignment.
If you have a High Deductible Health Plan (HDHP) — which many nurse benefit packages include as an option — you can contribute to a Health Savings Account (HSA). HSA contributions are deductible above-the-line, meaning they reduce your AGI even if you take the standard deduction. The 2026 limit is $4,300 single / $8,550 family. This is one of the few deductions W-2 nurses can always use regardless of whether they itemize.
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