Tax Cuts and Jobs Act (TCJA)
Quick definition
The 2017 federal tax law that suspended unreimbursed employee expense deductions, removing the ability of W-2 employees to deduct work mileage on federal returns.
The Tax Cuts and Jobs Act (TCJA) is the 2017 federal law that, starting in 2018, suspended the miscellaneous itemized deduction for unreimbursed employee expenses. That suspension is why a W-2 employee generally cannot deduct work mileage on a federal return.
Who it affected
The change hit W-2 employees who used to deduct mileage their employer did not reimburse. It did not affect the independent contractor or sole proprietor, who still deduct business miles on Schedule C.
What it means for drivers
If you are a W-2 employee, your only path to recovering work-driving costs is employer mileage reimbursement. If you are self-employed, the TCJA did not take your deduction away.
Related terms
One Big Beautiful Bill (OBBBA)
Federal legislation that made permanent the suspension of unreimbursed employee expense deductions originally introduced by the TCJA.
Mileage Reimbursement
Payment from an employer to a worker for using their personal vehicle for work.
Independent Contractor
A worker classified as self-employed for tax purposes. Receives 1099 income instead of W-2 wages.
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