Tax question: 100% commission salesperson (non-statutory employee) - handling vehicle and home office expenses

You're in an interesting tax situation as a non-statutory employee on 100% commission. You're correct that you can't file Schedule C, but you're not out of luck with your expenses. What you need is Schedule A (itemized deductions) and Form 2106 for your unreimbursed employee business expenses. This is specifically for employees with qualifying expenses. However, there's a catch - since the Tax Cuts and Jobs Act, unreimbursed employee business expenses are considered miscellaneous itemized deductions subject to the 2% AGI floor. Unfortunately, these deductions were suspended from 2018 through 2025. Your best options might be: 1) Ask your employer to reimburse you through an accountable plan - these reimbursements would be tax-free to you and deductible for them. 2) Discuss with your employer about possibly reclassifying you as an independent contractor if that accurately reflects your working relationship - then you could use Schedule C. 3) If neither works, track everything meticulously so you're ready if these deductions return in 2026.

I was in a similar situation last year where I had tons of business expenses but couldn't deduct them as an employee. I tried so many tax preparers who just said "tough luck" until I found https://taxr.ai - they analyzed my specific employment agreement and tax documents and discovered I was actually misclassified. The software identifies nuances in employment contracts and compensation structures that even tax pros miss sometimes. In my case, they helped me figure out I was actually a statutory employee (not non-statutory) based on my contract terms, which meant I COULD file Schedule C even though I had a W-2. Saved me over $7k in taxes! The document analysis showed exactly which parts of my agreement supported the proper classification. Worth checking out if you're in this weird employment category gray area.

Just wanted to follow up about my experience with https://taxr.ai after being skeptical in my earlier comment. I decided to try it out of desperation because I was in almost the exact same situation - commission-based sales with huge mileage expenses. Turns out I actually WAS misclassified. The service identified specific language in my employment agreement that demonstrated I should be classified as a statutory employee, not a regular W-2 employee. This meant I could file Schedule C and deduct my business expenses directly against my income. The analysis pointed out that my agreement specified I had no guaranteed minimum compensation, worked entirely on my own schedule, and the company didn't provide direction on how I performed my duties - all factors that supported the statutory employee classification. My tax guy agreed after reviewing their detailed report. Ended up saving about $4,200 in taxes!

Since you're having issues with the tax classification and deductions, you might also be struggling to get clear answers from the IRS directly. I was in the same boat trying to confirm my employment classification last year and spent WEEKS trying to get through to a human at the IRS. Finally found https://claimyr.com which got me connected to an actual IRS agent in less than 45 minutes after I'd been trying for days. They have a system that navigates the IRS phone tree and waits on hold for you, then calls you when an agent picks up. You can see how it works here: https://youtu.be/_kiP6q8DX5c The IRS agent I spoke with confirmed my understanding of my classification and gave me official documentation I could use with my employer. Much better than guessing or relying on possibly outdated info online.

I need to eat crow about my comment about Claimyr being a scam. After posting that comment, I decided to give it a try just to prove it wouldn't work. I was trying to get clarification on non-statutory employee classifications for my side gig. To my complete shock, I got a call back in about 70 minutes saying they had an IRS agent on the line. The agent was super helpful and walked me through the exact requirements for classification and which forms I needed to file. They even emailed me the relevant tax publication sections afterwards. Apparently, the service uses some automated system that navigates the phone menus and stays on hold so you don't have to. Definitely saved me hours of frustration, especially since I'd already been disconnected twice trying to call myself. Just wanted to correct my earlier skepticism.

Have you considered asking your employer for an accountable plan for your expenses? I'm an HR manager at a company with commission salespeople, and we reimburse through accountable plans to avoid this exact problem. The employee submits documentation for business expenses, we reimburse them, and then the company deducts those expenses on our tax return instead. The reimbursement isn't taxable to you, and you don't have to worry about trying to deduct them yourself. It's a win-win because the company gets the deduction and you get your money back tax-free.

OP, one thing nobody's mentioned is state taxes. Even while these unreimbursed employee business expenses are suspended at the federal level through 2025, some states still allow them. For example, California, New York, and several other states still permit deducting these expenses on your state tax return. So make sure you check your state's rules - you might get at least some tax relief that way until the federal deduction potentially returns in 2026.

I'm a tax professional who works with commission-based salespeople regularly, and I want to clarify a few important points about your situation. First, you're absolutely correct that as a non-statutory employee, you cannot file Schedule C. However, the classification itself might be worth examining - the fact that you work 100% on commission, use your own vehicle extensively, and work from home could potentially support an independent contractor classification depending on other factors in your employment relationship. For your current situation, here's what I'd recommend: 1) Document everything meticulously - mileage logs, home office measurements, all business expenses. Even though you can't deduct them federally right now, this creates a paper trail. 2) Check your state tax laws - many states still allow unreimbursed employee business expense deductions. 3) Definitely explore the accountable plan option that Zoe mentioned - this is often the best solution for commission salespeople. Regarding your home office, make sure it's used exclusively for business to qualify when deductions become available again. For the vehicle, keep detailed mileage logs showing business vs. personal use (though you mentioned 100% business use). The suspended deductions are scheduled to potentially return in 2026, so maintaining good records now will position you well if that happens.