mileage deduction and auto allowance for w2

[tygeb]

SInce mileage is no longer deductible for a w2 employee, do i still have to track mileage if i am getting a car allowance?

Per this discussion:  

‎May 31, 2019 5:51 PM:     NOTE FOR 2018 AND LATER (added 3/10/19): The new tax law eliminates all itemized deductions that are subject to the 2% of AGI limitation, including job-related mileage and other job related expenses, for 2018 through 2025. That means that a W-2 employee cannot claim any deduction for job-related mileage.

[xmasbaby0]

If you are a W-2 employee you do not need to track mileage for your fedetal return. But you say your employer gives you a mileage allowance. Ask your employer if they still need you to keep a record for the employer. 

[tygeb]

Sorry, i'm probably confused.  I mentioned they are provided an car allowance, not a mileage allowance.  are they they same?

[rjs]

There is no reason to track your mileage for federal tax purposes, since you cannot claim a deduction for the mileage. The car allowance is just additional income on your tax return. You don't have to explain it.

There are two reasons that you might still have to track your mileage.

1. Your employer might require you to report your mileage to the employer in order to get the car allowance.

2. Some states still allow a deduction for job-related expenses, even though the federal tax law doesn't allow it. If you are able to itemize deductions on your state tax return, and your state allows the deduction for job-related expenses, you would need to track your mileage to calculate and support the deduction on your state return. This only applies if the car allowance is reported as taxable income. If the car allowance is paid through an "accountable plan" and is not included in your taxable income, then you cannot claim a deduction for mileage.

If neither of these two situations applies, there is no need for you to track your mileage.

[rjs]

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@tygeb wrote:

Sorry, i'm probably confused.  I mentioned they are provided an car allowance, not a mileage allowance.  are they they same?

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People are not always precise in their terminology here, so we don't make such fine distinctions. "Car allowance" and "mileage allowance" might or might not mean the same thing. The question is whether the allowance that you get from your employer, whatever you call it, depends on the number of miles that you drive for work. If it does, then obviously you have to keep track of your mileage and report it to your employer. If the allowance does not depend on the mileage, then there is no need to track your mileage. However, the state tax consideration that I discussed in my earlier reply above might still apply.

[tygeb]

Interesting.  Thank you for such clarity.  It raised more questions. 

On my expense report, i have 2 questions for Auto Expense;
1)  I certify that i have had auto expenses that equal or exceed the auto expense.  or 

2)  I did not equal or exceed the auto expense allowance and wish to be paid the actual expense.

My whole discussion, so you know the background, is based upon my employer choosing to forgo a company car i was provided free usage of, and to compensate me $600 / month as auto allowance.    I know this will be counted for income and that is fine.  The question is, how is that $600 accounted for with the 2 questions above.  Is it based on miles i drive or what is it covering?  And if it's miles, do i figure the miles X $.55 to get my total expense?  or  reverse figure $600 / $.55 = 1090 mile per month is what is covered mileage for work.  Then is over the 1090 mile deductible in Oregon?

Thanks again.  I didn't know how to get all this out in a question. 

[rjs]

That's not a tax question. You're asking how to fill out your employer's form. You have to ask your employer. Since the car allowance is being reported as taxable income in any case, how you fill out the employer's expense report form has no effect on your taxes.

As far as taxes are concerned, it makes no difference why you are getting the car allowance. It's just additional wages on your tax return.

[tygeb]

No don't need help on filling out the form, i have been filling it out for years, but the auto deduction part has changed with  the car change explained earlier.   So if it is based on mileage then it becomes a tax question right?   If it is a mileage question, then what would the answer be from the other questions i asked regarding the 1090 miles, and if Oregon is one of those states that allows still the deduction?  thanks again.

[rjs]

Job-related expenses are not deductible on the Oregon tax return. (Oregon follows the new federal tax law on this.) You cannot claim any deduction for mileage or car expenses on your Oregon tax return. It makes no difference whether your employer reimburses all, some, or none of the expenses. So there is no need to track your mileage for either your federal or Oregon tax return.

[tygeb]

thank you.