The One Big Beautiful Bill Act (OBBBA) creates a new deduction allowing qualifying workers to exclude overtime pay from federal taxable income. This directly benefits hourly workers, tradespeople, nurses, and anyone earning overtime wages under the Fair Labor Standards Act.
A worker earning $15,000/year in overtime pay at a 22% federal rate saves $3,300/year in federal income taxes under the new overtime deduction.
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If you use your cell phone for business, you can deduct the business-use percentage of your monthly bill, data plan, and the cost of the device itself. For most self-employed professionals, this is 80–100% of the total cost.
A freelancer paying $120/month for their phone and using it 90% for business deducts $1,296/year, saving $389–$518 depending on tax bracket.
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Any supplies you purchase and use in your business are fully deductible in the year purchased. This includes paper, pens, printer ink and toner, folders, binders, postage, envelopes, labels, staples, tape, and any other consumable materials used in your work.
A small business owner spending $1,200/year on office supplies saves $360–$480 in taxes depending on their bracket.
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If you are required to hold a professional license to practice your trade, the cost of obtaining and renewing that license is fully deductible as a business expense. This includes state bar fees for attorneys, medical license renewals, nursing licenses, contractor licenses, real estate licenses, CPA licenses, and any other required professional credentials.
A physician paying $2,500/year in state medical license fees, DEA registration, and board certification renewals saves $750–$1,000 in taxes.
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Continuing education required to maintain your professional license or improve skills in your current trade is fully deductible. This includes CME credits for physicians, CLE credits for attorneys, CPE credits for CPAs, CE credits for nurses, real estate CE, and any other mandatory or voluntary professional development directly related to your current work.
A CPA spending $3,000/year on CPE courses, webinars, and AICPA membership saves $900–$1,200 in taxes.
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Work clothing that is required as a condition of employment and not suitable for everyday wear is fully deductible. For healthcare professionals, this includes scrubs, lab coats, surgical gowns, nursing shoes, compression socks worn for work, and any other required clinical attire. The clothing must be required by your employer or profession and not adaptable to everyday use.
A travel nurse spending $800/year on scrubs, compression socks, and nursing shoes deducts the full amount, saving $240–$320 in taxes.
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Healthcare professionals can deduct the cost of medical supplies and clinical equipment used in their practice. This includes stethoscopes, blood pressure cuffs, otoscopes, diagnostic tools, syringes, gloves, masks, bandages, and any other consumable or durable medical supplies used in patient care. Larger equipment qualifies for Section 179 immediate expensing.
A self-employed nurse practitioner spending $2,000/year on clinical supplies, a new stethoscope, and diagnostic tools deducts the full amount, saving $600–$800.
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Professional liability insurance (malpractice insurance) premiums are fully deductible as a business expense. This applies to all licensed professionals including physicians, dentists, nurses, attorneys, financial advisors, CPAs, architects, and any other professional who carries liability coverage for their practice.
A physician paying $8,000/year in malpractice insurance premiums deducts the full amount, saving $2,400–$3,200 in taxes.
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All wages, salaries, and compensation paid to home health aides (HHAs), certified nursing assistants (CNAs), personal care aides (PCAs), and other direct care workers are fully deductible under IRC §162. This includes regular wages, overtime pay, shift differentials, and holiday pay. The employer's share of FICA taxes (Social Security and Medicare) is also deductible, as are unemployment insurance premiums (FUTA/SUTA) and workers' compensation insurance premiums.
A home health care agency with $500,000 in annual caregiver wages saves $185,000 in federal taxes at 37% effective rate — wages are the largest single deduction for most agencies.
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All medical supplies and personal protective equipment (PPE) used in providing home health care services are fully deductible: disposable gloves, masks, gowns, face shields, hand sanitizer, wound care supplies, blood pressure cuffs, pulse oximeters, glucometers, thermometers, stethoscopes, and other clinical equipment. Larger equipment (hospital beds, wheelchairs, Hoyer lifts, CPAP machines) qualifies for Section 179 immediate expensing if owned by the agency. Uniforms, scrubs, and non-adaptable work clothing are also deductible.
A home health care agency spending $18,000/year on PPE, supplies, and clinical equipment saves $6,660 in taxes at 37%.
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All training, certification, and licensing costs for caregivers and agency staff are fully deductible: CNA certification programs, HHA training courses, CPR and first aid certification, medication management training, dementia and Alzheimer's care training, OSHA compliance training, HIPAA training, background check fees, and continuing education requirements. Agencies can also establish an Educational Assistance Program (IRC §127) to provide up to $5,250/year in tax-free education benefits to each employee.
A home health care agency spending $15,000/year on caregiver training, certifications, and background checks saves $5,550 in taxes at 37%.
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Registered nurses, LPNs, and CNAs can deduct state nursing license renewal fees, NCLEX exam fees, and state board of nursing fees. These are required to maintain your professional license and are fully deductible as ordinary and necessary business expenses.
A travel nurse paying $200/year in license renewal fees across 3 states deducts $600, saving $222 in taxes at 37%.
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Advanced Cardiac Life Support (ACLS), Basic Life Support (BLS), Pediatric Advanced Life Support (PALS), and specialty certifications like CCRN, CEN, CNOR are all fully deductible. These certifications are required by most hospitals and travel nursing agencies.
A critical care nurse spending $800/year on ACLS, CCRN, and BLS certifications saves $296 in taxes at 37%.
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Travel nurses who maintain a tax home can receive tax-free housing stipends and meal allowances from their staffing agency. These stipends are not included in your taxable income as long as you maintain a permanent tax home and are working away from it.
A travel nurse receiving $2,000/month in tax-free housing stipends saves $8,880/year in taxes at 37%.
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The QBI deduction gives freelancers a 23% discount on all net business income starting 2026 — most miss it.
A Solo 401(k) can shelter up to ~$70,000/year from taxes in 2026 — far more than a traditional IRA.
Vehicle deductions require a mileage log — without it, the IRS will disallow the entire deduction.
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