Toll Roads and Taxes: Claiming Tolls on Your Tax Return
Want to know what vehicle expenses are tax-deductible? You’ve come to the right place!
Yes, we know taxes can be confusing – so we want to try and simplify them. Let’s find out what travel taxes you can claim on your IRS form.
Claiming tax back on business travel
Good news! If you are self-employed or an independent contractor and use your vehicle for work, you can claim travel expenses back.
However, the exact business travel costs you can claim back depend not only on your employment status but also on your travel purpose.
The rules for business travel deductions changed with the Tax Cuts and Jobs Act 2018, so let’s find out what these rules are.
Before the TCJA, employees could claim travel expenses that their employers didn’t reimburse. Unfortunately, this has now changed, and all miscellaneous itemized deductions have been eliminated for employees. However, if you are a contractor, freelancer, small-business owner, or sole proprietor – you can claim business-related travel back.
But first off – what classifies business travel. Can I claim tax back on expenses I incur to and from work?
What does the IRS consider business travel?
Unfortunately, simply driving to and from work is considered commute – NOT business travel - even if you’re a contractor. Say you’re a mobile hairdresser - for example - driving to and from a client’s home is not considered business travel. It just won’t cut it! (see what we did there).
To claim business-related travel, your work must require you to be away from your tax home for longer than an ordinary work day.
According to the IRS, your tax home is the entire city or general area where your business or work is located., regardless of where your family home is.
What business-related travel can I claim?
If you travel by plane, train, or bus, you can deduct the cost of the actual ticket plus baggage costs.
If you rent a car, the car rental cost is also deductible as long as it is used exclusively for business.
The IRS also considers business-related meals and hotel costs as travel costs - as long as they aren’t exceptional (i.e., you probably can’t claim tax back on a penthouse suite in a luxury 5-star hotel and write it off as necessary accommodation).
Regarding meals, you can generally deduct half of the costs.
When it comes to a vehicle you own or lease, you can deduct the actual expenses or the standard rate-per-mile driven.
If you claim the standard mileage deduction, you can write off 56 cents per mile in 2021. For 2022, this increases to 58.5 cents per mile. If you claim actual expenses, you won’t be able to deduct mileage or tolls. Still, you can write off the costs incurred to actually own, operate, and maintain your vehicle (including the costs of gas, oil, washing, and repairs).
What about tolls?
Can you claim tolls on your taxes? More good news! Yes!
Tolls qualify as a business expense. This means if you encounter tolls on your work trip, you’ll be able to deduct them on Schedule C of your 1040 form.
Make sure you keep your toll receipts as proof that you paid these tolls. The great thing about Uproad is that the app automatically keeps track of your toll bills. Just head to the Transactions section on the Dashboard,, filter the dates and types of transactions you want to see, and you can instantly download them as a PDF or CSV file.
If you use an electronic transponder, you’ll probably have to write down each trip you take in case you’re audited.
Now, as with all tax deductions - good records are essential. Claim toll expenses on Form 2106 and report them on Form 1040 or Form 1040-SR as an adjustment to income. Also – make sure you keep track of all your business-travel related-costs – meals, tolls, rental cars, etc.