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Level 2

Vehicle allowance

I have a twofold question.  I get a $500 vehicle allowance from my employer that is taxed.  Since it is taxed, do I need to deduct the amount they give me from my mileage?

Also, they pay for my gas with a company credit card.  Should the gas money be deducted from my mileage?

2 Replies
Level 20

Vehicle allowance

Mileage for what? Work related expenses incurred as a W-2 employee are no longer deductible. If you are being reimbursed under a non-accountable plan then the money is 100% taxable income to you with no deduction. If you are reimbursed under an accountable plan then the amount reimbursed is not included in box 1 of your W-2.


Employee Tax Expert

Vehicle allowance

@Carl is correct since you are an employee you can not deduct employee expenses this year, including mileage.  Under the Tax Cuts and Jobs Act (TCJA) that Congress signed into law on December 22, 2017, the unreimbursed employee expenses deduction has been suspended in tax years 2018 through 2025.