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lincolnhester88
Returning Member

Did the mileage deduction go away for w-2 employee in 2018? If so what is a guy going to do who drives 45000 miles a year for his employer unriembursed?

 
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3 Replies
Carl
Level 15

Did the mileage deduction go away for w-2 employee in 2018? If so what is a guy going to do who drives 45000 miles a year for his employer unriembursed?

All W-2 job related expenses are no longer allowed. That includes travel/mileage expenses.

TomL
New Member

Did the mileage deduction go away for w-2 employee in 2018? If so what is a guy going to do who drives 45000 miles a year for his employer unriembursed?

If you work via a W-2, you need to negotiate an automobile reimbursement with your employer even if you take a "cut in pay".
rjs
Level 15
Level 15

Did the mileage deduction go away for w-2 employee in 2018? If so what is a guy going to do who drives 45000 miles a year for his employer unriembursed?

Yes, the deduction went away. Not just for mileage. All deductions for employee business expenses of any kind are eliminated for 2018 through 2025.

The only thing you can do is negotiate with your employer for partial reimbursement in view of the change in the tax law. I say partial because the tax deduction did not give you full dollar for dollar reimbursement. The 2018 rate for business mileage is 54.5 cents per mile. For 45,000 miles that would have been a deduction of $24,525. If you're in the 22% tax bracket, that $24,525 deduction would have reduced your tax by $5,395. Another way of looking at it is that, in the 22% bracket, a deduction of 54.5 cents per mile is worth 12 cents per mile to you (22% of 54.5 cents). So if your employer reimburses you 12 cents per mile, you come out the same as if you could take the deduction. For 45,000 miles at 12 cents per mile, you would get a reimbursement of $5,400, essentially the same as the $5,395 tax savings if you could take the deduction. This is assuming that the reimbursement is from an accountable plan, so that the reimbursement is not taxable income.

I haven't considered state tax. I don't know if your state allows the deduction, or if you were able to itemize deductions for your state tax. If the state does allow it, it might still allow it, even though it's not allowed for federal tax.

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