Travel Therapy Tax Deductions

Most work expenses you pay as an employee are not deductible on your federal return. IRS Publication 463 explains that miscellaneous itemized deductions subject to a floor are suspended, and says: “The suspension applies to tax years beginning after 2017.” Its exceptions are narrow groups, such as Armed Forces reservists and qualified performing artists, and an agency-employed traveler is not among them.

That said, several deductions remain available, and some expenses may be deductible through other mechanisms. A CPA specializing in travel healthcare is essential for maximizing your legitimate deductions under current law.

State Licensing Fees

Every state license you purchase for travel assignments is a professional expense. Compact privilege fees are the same kind of expense.

Continuing Education

CEU courses, workshops, conferences, and certification exams required to maintain your license are work expenses, but as an employee you generally can't deduct them on your federal return. This includes registration fees, course materials, and associated travel costs for in-person events. Many agencies provide CEU stipends — expenses beyond what your agency covers may still be deductible.

Professional Memberships

APTA, AOTA, ASHA dues, specialty section memberships, and state association fees. These are straightforward professional expenses.

Malpractice Insurance

Premiums for professional liability insurance you pay out of pocket. Some agencies provide this; if yours doesn't, you pay the premiums yourself, and as an employee you generally can't deduct them on your federal return. To see what an offer covers before you pay for anything yourself, ask a recruiter: Find my next contract.

Professional Supplies

Scrubs and clinical clothing not suitable for everyday wear. Clinical tools you purchase for work (goniometer, dynamometer, etc.). Professional reference books and subscriptions.

Travel Between Assignments

Mileage or transportation costs when traveling from your tax home to an assignment location, or between assignment locations. As an employee you generally can't deduct these miles on your federal return (IRS Publication 463), so ask whether the agency reimburses them. Keep a mileage log with dates, destinations, and purpose.

Housing expenses at your assignment location — your housing stipend covers this tax-free (if you have a valid tax home). You can't also deduct it.

Meal expenses at your assignment location — covered by your M&IE stipend.

Commuting to your assignment facility — daily commuting from your local housing to the facility is not deductible (same as any employee commuting to work).

Personal travel or vacation — even if you combine personal travel with an assignment move.

Keep receipts for everything. Digital copies are fine — save them in a dedicated folder organized by year and category.

Use a mileage tracking app for travel between assignments. Manual logs work too, but an app is more reliable and creates automatic records.

Separate personal and professional expenses. Use a dedicated credit card or bank account for professional expenses to simplify tracking.

Don't guess at tax time. Track expenses throughout the year. A monthly 10-minute review is easier than reconstructing a year's worth of expenses in April.