Yes, you can claim tolls on your taxes, but generally only under specific conditions related to business expenses.
Understanding Toll Deductibility
Tolls are generally tax-deductible when they are incurred for business purposes by self-employed individuals or business owners. This includes costs for various types of toll-based travel.
When Tolls Are Tax-Deductible
If you are self-employed, an independent contractor, or own a business, tolls paid as part of your necessary business travel can be deducted. This covers tolls for:
- Highways
- Bridges
- Tunnels
- Electronic toll collection systems (like EZ Pass, SunPass, or similar)
Examples of deductible business travel:
- Driving to a client's office or a job site.
- Traveling between multiple business locations.
- Attending business conferences or training relevant to your trade.
- Making deliveries or sales calls.
These tolls are considered part of your ordinary and necessary business expenses, similar to other vehicle-related costs like gasoline, maintenance, and depreciation.
When Tolls Are Not Deductible
It's important to distinguish between business and personal use. Tolls are typically not deductible in the following scenarios:
- Personal Commuting: Tolls paid for your regular commute from your home to your primary workplace (if you are a W-2 employee) are considered personal commuting expenses and are not deductible.
- Personal Travel: Tolls incurred for personal trips, vacations, errands, or non-business-related travel are not tax-deductible.
- W-2 Employees: If you are an employee who receives a W-2 form, you generally cannot deduct unreimbursed employee business expenses, including tolls, due to changes in tax law (specifically, the Tax Cuts and Jobs Act of 2017 suspended miscellaneous itemized deductions subject to the 2% adjusted gross income limit for tax years 2018 through 2025).
Key Scenarios for Toll Deductions
The table below summarizes common situations regarding toll deductibility:
| Scenario | Deductible? | Details |
|---|---|---|
| Self-Employed Business Travel | Yes | Tolls incurred by self-employed individuals or business owners for necessary business activities (e.g., client meetings, service calls, product deliveries). |
| W-2 Employee Commuting | No | Tolls for travel between your home and your regular workplace are considered personal commuting expenses. |
| W-2 Employee Business Travel | No | Unreimbursed employee business expenses (including tolls) are generally not deductible for W-2 employees for tax years 2018 through 2025. |
| Personal Travel | No | Tolls for vacations, personal errands, family visits, or any non-business-related trips. |
| Temporary Work Location | Potentially | If you have a regular workplace and travel to a temporary work location (e.g., for a specific project that lasts less than a year), tolls for that travel might be deductible, even if you are a W-2 employee (consult a tax professional for specific guidance). |
How to Claim Deductible Tolls
If you qualify to deduct tolls, you will typically include them as part of your overall vehicle expenses on the appropriate tax form, such as Schedule C (Form 1040), Profit or Loss From Business, if you are self-employed.
Important Considerations:
- Record Keeping: It is crucial to maintain accurate and detailed records of all business-related tolls. This includes dates, destinations, business purpose, and the amount paid. Electronic toll statements, receipts, or mileage tracking apps can help.
- IRS Guidelines: Always refer to the latest IRS publications, such as Publication 463, Travel, Gift, and Car Expenses, for comprehensive and up-to-date information on deductible business expenses.
By understanding the distinction between business and personal use, and maintaining diligent records, you can accurately determine if your tolls qualify for a tax deduction.
