Starting in tax year 2018, you can no longer deduct employee expenses, including mileage and/or automobile expenses.
Even in previous years, the deduction was limited to being an itemized deduction, subject to the 2% of AGI threshold.
Should the $10K have been reported as Income? It depends on how your employer handles it. If he pays you a set amount (for example $500 per month) without making you account for how you spend it, then yes he is supposed to include it as taxable income on your W-2, in box 1.
If, on the other hand, he has an "accountable plan", wherein he only reimburses you for your actual expenses, then he does not include it on your W-2.
