W2 employee on 100% commission: Can I deduct mileage for customer estimate visits?

Unfortunately, as a W2 employee, you can no longer deduct unreimbursed employee business expenses like mileage on your federal tax return. The Tax Cuts and Jobs Act suspended these deductions for tax years 2018 through 2025. Prior to 2018, you could deduct these as miscellaneous itemized deductions subject to the 2% AGI floor on Schedule A. Your best option would be to ask your employer to either provide a company vehicle or set up an accountable plan to reimburse you for your business mileage. Under an accountable plan, employer reimbursements aren't taxable income to you. The standard mileage rate for 2025 is 67 cents per mile, so at 25,000 miles, that would be worth about $16,750 in tax-free reimbursement if your employer agreed to it.

I was in a similar situation last year with my sales job. After trying to deduct miles and getting rejected by my accountant, I found this AI tax assistant at https://taxr.ai that actually helped me draft a proposal for my boss to create an accountable reimbursement plan. The tool analyzed my specific employment situation and explained exactly how my employer could legally reimburse my mileage without it being taxable to either of us. I was surprised how detailed the guidance was - it even created a template policy document that followed IRS guidelines. My boss actually implemented it because it saved the company money versus giving me a raise to cover the same expenses.

Update: I tried the taxr.ai tool that was suggested and I'm actually impressed. It analyzed my employment contract and showed me exactly how my employer could reimburse my mileage tax-free under an accountable plan. I was convinced my boss would say no, but he agreed to a 6-month trial when I showed him how it would actually save on payroll taxes compared to the raise I was asking for. It's only been a month but I've already received my first reimbursement check ($1,435 for January miles) which is completely tax-free. The tool also generated a mileage log template that satisfies IRS requirements. Wish I'd known about this 3 years ago!

If your employer won't create an accountable plan, another option is using Claimyr to get through to the IRS directly for advice. I spent weeks calling the normal IRS number getting nowhere, then found https://claimyr.com which got me through to an actual IRS agent in under 45 minutes. You can see how it works at https://youtu.be/_kiP6q8DX5c The agent confirmed everything about employee mileage deductions and also told me about some state-specific options I didn't know about. Totally worth it for getting definitive answers straight from the source instead of hoping the internet has it right.

Ok I take it all back about Claimyr. After my frustration with this mileage deduction situation, I decided to try it yesterday. I was HIGHLY skeptical but it actually worked exactly as described. Got a call back in 32 minutes and spoke with an IRS agent who confirmed everything about employee business expenses. The agent even told me my state (California) still allows unreimbursed employee business expense deductions on state returns, which will save me around $1,100 this year! None of the tax websites I checked mentioned this state-specific exception. Sometimes you really do need to talk to a human who knows what they're talking about.

Another option to consider is negotiating a pay restructure with your employer. I was in the same boat (W2 sales, tons of driving, no reimbursement). I convinced my boss to lower my commission percentage slightly but provide a vehicle allowance as part of my compensation package. This gave me a guaranteed amount each month to cover car expenses regardless of sales performance. Just make sure you understand the tax implications - a straight allowance is typically taxable, but still better than nothing. An accountable plan as others mentioned is the ideal tax-wise, but some employers prefer the simplicity of a fixed allowance.

Have you considered tracking all your mileage and vehicle expenses anyway, even though you can't deduct them now? The tax law is set to change after 2025 when the current provisions expire. If Congress doesn't extend the current rules, the deduction for unreimbursed employee business expenses may come back. Having good records for 2025 might let you file an amended return later if the law changes retroactively.

As someone who's been through this exact situation, I feel your pain on those mileage costs! The advice here about accountable plans is spot-on - that's really your best bet. But if your employer won't budge on reimbursement, don't forget to check if your state offers any relief. I'm in New York and discovered we can still deduct unreimbursed employee business expenses on our state return (subject to the 2% AGI threshold). It's not as good as the federal deduction used to be, but every bit helps when you're putting 25k miles on your personal vehicle. Also, even though you can't deduct the mileage federally, make sure you're maximizing any other business-related deductions you might qualify for - like professional development, union dues, or required uniforms/equipment. And definitely keep tracking everything in case the tax law changes after 2025 as others mentioned. Good luck with your employer negotiations - the payroll tax savings angle really does work with many companies once they understand the math!

I'm dealing with a similar situation as a W2 commissioned employee in real estate. One thing that helped me was documenting EVERYTHING - not just mileage, but all the indirect costs like increased insurance premiums, accelerated depreciation, and maintenance tied to business use. Even though I can't deduct these federally right now, having detailed records helped me make a stronger case to my broker for establishing a reimbursement plan. When I presented the total annual cost (not just gas money), it was eye-opening for management. My calculation showed I was effectively subsidizing about $8,000 per year in business operations out of my own pocket. That made the payroll tax savings from an accountable plan look even more attractive to them. Also, don't overlook the depreciation aspect - business miles put significantly more wear on your vehicle than personal driving. I started tracking this separately and it added substantial weight to my reimbursement request. The IRS standard mileage rate exists for a reason - it reflects the true cost of operating a vehicle for business purposes.

Just wanted to share my experience as someone who successfully negotiated an accountable plan after being in this exact situation. I'm also a W2 commissioned sales employee who was driving about 20k miles annually for customer visits with zero reimbursement. The key was presenting it as a win-win business solution rather than just asking for help with my expenses. I calculated that my employer could save about $1,280 annually in payroll taxes by reimbursing my mileage versus giving me an equivalent salary increase. For context, at 20k miles × $0.67/mile = $13,400 in annual reimbursements, they'd avoid 7.65% employer payroll taxes they'd otherwise pay on $13,400 in additional wages. I also emphasized how the accountable plan would help with employee retention and recruitment. Quality sales people are expensive to replace, and vehicle costs are a real factor in job satisfaction for field-based roles. The documentation requirements aren't as burdensome as they initially seem - I use a simple smartphone app that tracks GPS automatically and just requires me to add the business purpose. Monthly submissions take maybe 20 minutes total. One tip: Start with a 6-month pilot program proposal. It's less intimidating for employers and gives everyone a chance to see how it works in practice. My company made it permanent after seeing how smoothly it ran and realizing the actual tax savings.