Roads provide a significant benefit to the general population, so they are typically built with public money and open for use by the general public. But when state and municipal budgets get tight, tolls are sometimes instituted to help pay for road construction and maintenance. If you have to drive your car for business, those tolls can represent a part of the cost of doing your job that you can write off on your taxes.
Tolls and Parking
You can typically write off your actual expenses for using your car for business, or you can just use the Internal Revenue Service's standard mileage rate, which was 56.5 cents per business mile as of the 2013 tax year. Regardless of which method you choose, you can add in the cost of tolls and parking you incur for business travel. But you can't include any of the costs associated with commuting to and from your regular place of business.
Employee Business Expense
If you work as an employee, you'll have to itemize your deductions on Schedule A to write off your tolls and other car expenses. The IRS considers them to be part of your employee business expenses, which fall under the category of miscellaneous deductions. Add the cost of tolls, parking, your other car expenses to your other employee business expenses and combine that amount with other miscellaneous expenses. Miscellaneous expenses are subject to the IRS's 2 percent rule, which means you can only deduct the total amount that exceeds 2 percent of your adjusted gross income.
Business Use of Car
You get a better tax break if you operate your car for your own business. The rules for what you can deduct are the same, so you can include tolls and parking with your other car expenses, but you report those expenses on Schedule C, rather than Schedule A. There is no 2 percent rule for Schedule C, and you can write off your business use of car expenses whether you itemize or claim the standard deduction.
Whether you work as an independent business person or as an employee, if you want to write off your car expenses, such as amounts you paid for tolls, you must keep a written record of those expenses. The IRS doesn't specify any particular method of record keeping, as long as it is accurate, but it does recommend keeping a mileage log in which you can record the business purpose of each trip.
- Internal Revenue Service: Topic 510 -- Business Use of Car
- Internal Revenue Service: Publication 463, Parking Fees and Tolls
- Internal Revenue Service: Schedule A
- Internal Revenue Service: Schedule C
- Internal Revenue Service: Topic 508 -- Miscellaneous Expenses
- LECG: Economic Benefits of Toll Roads Operated by the Transportation Corridor Agencies
- Internal Revenue Service: Standard Mileage Rates for 2013