Don't Forget These Deductions: Parking and Tolls
Listen and Subscribe Here
This week on the Sunlight Tax podcast, I’m chatting about another commonly missed tax deduction for self-employed individuals: parking and tolls. I’m diving into how tolls and parking should be tracked separately and added to the car expense category on tax schedules so you can get the deduction you deserve.
Join me in this episode to get some practical tips on how to easily track your parking and toll expenses for this upcoming tax season.
Also mentioned in today’s episode:
2:26 Tracking parking and tolls separately from mileage
2:44 Methods for tracking car expenses
4:30 Practical tips for maximizing your deductions
If you enjoyed this episode, please rate, review and share it!
Every review makes a difference by telling Apple or Spotify to show the Sunlight Tax podcast to new audiences.
Episode Links:
Sunlight episode on tracking mileage deduction
Get your FREE visual guide to tax deductions
Check out my 2-day Business Intensive
Order my book: Taxes for Humans: Simplify Your Taxes and Change the World When You’re Self-Employed
Transcript:
Hannah Cole (00:44)
Hello. Last week I talked to you about one of the business expenses that people often forget to get a deduction for because it does not show up in your bookkeeping, right? So it's something you have to proactively remember to put into your taxes at tax time. This week I'm coming at you with another one of these, which is parking and tolls.
So this is just a small deduction, but it is extra money that you might be missing. So listen up. When you track mileage, you're allowed to take a deduction for the expense of your car for business travel in your business. And business travel is one of those things. Using your car, it's one of those situations where you very likely, if you work for yourself,
Do not have a car that you just bought for the business and that is only used for the business, right? Only a much larger company is gonna have a setup like that. You, when you're self-employed, you're doing business travel in your family car, in your personal car, right? So it's a car where you also do grocery trips and go visit friends, but it is the car that you use to take your business trips as well. So for that reason.
There are some special rules around mileage and business taking a car expense. And I have an episode which I will link in the show notes for you about taking that mileage deduction. It's a really great deduction, highly recommend. But the really important thing to note is that when you take a mileage deduction, no matter which method you use, so whether you use what's called
The actual expense method where you actually save every single receipt, you know, oil changes, gas, everything for your car, and you take a portion of those actual expenses based on the ratio of business miles to total miles that you drove for the year. That's called the actual expense method. Or if you do the usually much better one called the standard mileage rate, where you just track your business miles and you
Multiply that times a government set rate every year. If you're using that mileage method, that accounts for the full cost of operating your vehicle, including depreciation, including insurance, including gas, all of it. So it's a it's a very generous deduction. But regardless of which method you use and how you're tracking your miles, I want you to know.
That parking and tolls for your business are actually tracked completely separately and outside of the number of miles that you drive. So, regardless of which method use to track your car expenses in your business, I want you to set up a separate way to track your parking and tolls. Because after you calculate the deduction that you get using either the standard business mileage method,
or the actual expense method, you get to add parking and tolls on top into that car expense category on your Schedule C.
So this is really nice, especially if you live in a place where, for example, you go meet a client in a big city. Parking is really expensive. So save those parking receipts, save your tolls or go through your Easy Pass record and note the tolls you paid when you were going on business trips. Because
That is just bonus money that you get to take on top of whatever mileage method you use in your business. All right. So just a little bit of a detail to help you get a few extra dollars out of your tax return this year.