Business car expenses when taking a personal vehicle out of service (delivered product for a W-2 employer) and not selling it.

[gthayden]

Changed jobs during the 2021 tax year. No longer use the personal vehicle for delivery purposes for my W-2 employer. Now only for 100% personal use. How do I input partial usage for business without selling the vehicle?

[ColeenD3]

How long did you have the vehicle? Employee business expense deductions were not available after 2017. It would have only been personal use since then. the conversion should have been made in the 2018 tax year.

If prior to that year, you used your vehicle for business, it would depend if you took actual expenses or standard miles.

[gthayden]

Please allow me to provide more detailed information. I bought a new vehicle in August 2020 to use as a delivery car for a pizza business that I work for (a W-2 employer). The car was bought as a personal vehicle and for delivering pizzas. I changed jobs in October of 2021, and the vehicle is not only used for personal use. The vehicle was used for deliveries from January 1st through October 15th of 2021. When I put the expenses into Turbo Tax, it asks if I sold it or took it out of service, and then asks how much I got from the sale. I put in $0.00 since I didn't sell it (only personal use now), but it doesn't appear that Turbo Tax recognizes my expenses for the time period I used it for business.

[MinhT1]

As an employee, you are not allowed to deduct any job-related expenses, So the mileage you drove for your employer is not deductible. Your vehicle is considered as your personal vehicle.

Up to tax year 2017, job-related expenses were deductible as an itemized deduction subject to the 2% of AGI floor.

Under the Tax Cuts and Jobs Act, the itemized deductions for job-related expenses subject to the 2% of AGI floor are suspended for expenses incurred after December 31, 2017 through 2025.

Therefore, your mileage as an employee is no longer deductible for tax years 2018 through 2025.

Some states (Alabama, California, Hawaii, Arkansas, New York, Pennsylvania, and Minnesota) still allow the deduction of job-related expenses.

[gthayden]

So what you are saying is that none of the expenses (gas, oil, maintenance, depreciation) can be deducted from my taxes? No wonder restaurants can't find delivery people anymore. It costs too much for the delivery person to use their own vehicle (which is a requirement for the pizza company where I worked - they did not provide delivery vehicles) since their costs are no longer deductible. The pizza company only paid minimum wage $7.25/hr and the drivers make most of their money from tips.