If I receive a W-2 from my employer can I write off vehicle cost such as mileage to go to work and purchase of my vehicle?

[AnthonyC · Accepted solution]

As a W2 employee, you may be able to deduct certain vehicle costs as a job-related expense if you are itemizing your deductions.  However, as a W2 employee, they are difficult to actually deduct from your taxes (and thus see any tax benefit).  This is because they are subject to a 2% floor.  Under the 2% rule, you're only allowed to deduct the portion of total miscellaneous expenses that exceed 2% of your adjusted gross income (AGI).  And, even then, this portion only becomes an itemized deduction, so you need to have more total itemized deductions than the standard deduction.

Also, commuting costs - i.e. the miles you log daily going back and forth to work - are NOT deductible.  They are considered personal expenses.  Only actual business mileage (i.e. from job site to job site or to visit clients) would be deductible. 

Note:  While this deduction is active for your 2017 tax return, it has been eliminated for 2018 and future years due to the Tax Reform Act.

See IRS Publication 463 (page 14) for further information on deducting transportation costs

See IRS Topic 510 - Business Use of a Vehicle

[avtomlin]

So, just to get this straight. Say I made $60,000 in a year, but drove 15,000 miles just for meeting clients (sales job). 

2% of 60k = $1,200

.59/mile driven = 15,000 x .59 = $8,850

So if those two figures are correct, the total I could deduct is $7,650? 

Now if that's correct, say my company gives a $500 per month stipend, assuming you hit your mileage for that month. Would I then have to deduct $6,000 from that above number giving me only $1,650 left to deduct? 

[DoninGA]

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@avtomlin wrote:

So, just to get this straight. Say I made $60,000 in a year, but drove 15,000 miles just for meeting clients (sales job). 

2% of 60k = $1,200

.59/mile driven = 15,000 x .59 = $8,850

So if those two figures are correct, the total I could deduct is $7,650? 

Now if that's correct, say my company gives a $500 per month stipend, assuming you hit your mileage for that month. Would I then have to deduct $6,000 from that above number giving me only $1,650 left to deduct? 

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The above answer is not valid for tax years 2018 thru 2025.  When the answers were ported over to the TurboTax Real Money Talk forum, the original dates of answers did not transfer.

For tax years 2018 thru 2025 employee business expenses are not deductible on a federal tax return, including vehicle mileage, due to the tax code changes that took effect on January 1, 2018.

[pk]

@avtomlin , agreeing with @DoninGA  answer, just wanted to point out  that if your employer gives you an amount to defray the cost of travel, that amount is to be treated as income and thus subject to taxes - should show on your W-2.  The only way around that is if the employer has an  accountable expense re-imbursement policy in place, where you have to substantiate ( expense report ) expenses and the  employer reimburses you based on some  formula---- this is because  the employer than can claim this as part of business expense and the reimbursed amount does not show up on your W-2 

[WallysWorld]

But what about 100% commission only sales people with $0 in reimbursement? We can't deduct anything?

[xmasbaby0]

@WallysWorld This was answered in another thread for you already.   W-2 employees cannot deduct any job-related expenses on a federal tax return, even if your pay is from sales commission.

Sorry---W-2 employees cannot deduct job-related expenses on a federal return.  Job-related expenses were eliminated as a federal deduction for W-2 employees by the tax laws that changed for 2018 and beyond.  Your state tax laws might be different in AL, AR, CA, HI, MN, NY or PA.

https://ttlc.intuit.com/questions/4482873-which-federal-tax-deductions-have-been-suspended-by-tax-re...

[shellysp]

If a W-2 employee provides in-home services to a half dozen clients each day but occasionally goes to the corporate office nearby her house, which is true?

1) *All* of the miles driven to and from client residences are deductible, those driven to the office are not.

2) The deduction is the total miles driven in a given day, minus one imputed office RT each day, regardless of whether the office is on that day's itinerary.

3) Deductible miles vary day to day, based on eliminating the first and last leg for that day.

4) Something else. 

[DoninGA]

@shellysp As a W-2 employee none of your employee business expenses are deductible on a federal tax return, including mileage, due to the tax code changes in effect for tax years 2018 thru 2025.