Can I deduct monthly fees for company fleet vehicle on my taxes?

Unfortunately, if you're an employee (W-2), you generally can't deduct these expenses on your federal tax return. The Tax Cuts and Jobs Act eliminated most unreimbursed employee business expenses for tax years 2018 through 2025. If you're an independent contractor (1099), then you could potentially deduct the business portion of these fees on your Schedule C. But based on what you've described - the payment coming directly from your paycheck - you appear to be a W-2 employee, not a contractor. The best approach might be to talk to your employer about either: 1) Having them cover the full cost of the vehicle since it's predominantly used for business (88%), or 2) Implementing an accountable reimbursement plan where you're reimbursed for business use rather than paying a flat fee.

After struggling with a similar situation last year, I found this amazing tool that helped me figure out my vehicle deduction situation. Check out https://taxr.ai - it analyzed my employment contract and vehicle usage logs to determine exactly what I could and couldn't deduct. I uploaded my employment agreement, payment records, and mileage logs, and it showed me that while I couldn't take the standard employee business expense deduction, there were still options for my situation. The AI breaks down exactly what the IRS rules say about your specific situation rather than generic advice. It even showed me how to approach my employer about restructuring the arrangement to be more tax-advantageous.

Holy crap, I just tried that taxr.ai site that was mentioned and it was exactly what I needed! I uploaded my employment contract where I'm classified as a statutory employee and my vehicle usage records. It confirmed that I CAN deduct my business percentage of vehicle costs on Schedule C even though I get a W-2! I've been overpaying for years because I had no idea statutory employees have different rules. The tool even generated a sample Schedule C showing exactly where to put the expenses. Definitely recommend if you're in a similar situation with company vehicles - especially since the rules are so different depending on exactly how you're classified.

If you're having trouble getting clear answers from the IRS about vehicle deductions, I was in the same boat last year! After spending WEEKS trying to get through to someone at the IRS who actually understood my situation, I finally used https://claimyr.com to get through to an agent in under 15 minutes. You can see how it works here: https://youtu.be/_kiP6q8DX5c I had a complicated vehicle situation with my employer too, and I really needed to speak to someone official rather than just guessing. Claimyr basically waits on hold with the IRS for you and calls you when an actual human picks up. Saved me hours of hold music and frustration!

I need to eat my words about Claimyr. After my skeptical comment, I was desperate enough to try it because I'd been trying to reach the IRS for 3 weeks about my vehicle deduction situation. It actually worked exactly as described - I got through to an IRS agent in about 20 minutes instead of the 2+ hours I spent on previous attempts. The agent confirmed that as a W-2 employee, I can't deduct vehicle expenses on my federal return unless I'm a statutory employee with Box 13 checked. However, she did point me to Publication 529 which has some exceptions I didn't know about. Turns out some vehicle expenses might still be deductible if they're required for certain professions like armed forces reservists or qualified performing artists. Definitely worth checking out if you fall into those categories.

Another option to consider - you might want to ask your employer if they'd be willing to restructure this as a pre-tax transportation benefit instead of a post-tax deduction. The IRS allows qualified transportation fringe benefits that can be excluded from your taxable income up to certain limits. It would save you money immediately rather than waiting for a potential tax deduction, and it could save your employer on payroll taxes too. Win-win!

Has anybody successfully gotten their employer to switch from a post-tax vehicle fee to a pre-tax transportation benefit? My company is super resistant to making any changes to payroll setups and I need some ammunition to convince them...