How to deduct parking expenses for taxes is just one of many questions that people ask when trying to fill out the complicated tax forms provided to them by the IRS. It is important to keep all parking receipts as proof of your deduction and not to include parking tickets as a work related expense.
- Determine which parking expenses can be used as a deduction. Parking fees associated with work related travel are deductible on your taxes as an un-reimbursed employee business expense. If you are self-employed, the parking fees will be deducted as a business expense. Any parking fees or tolls that were not associated with work-related business are not tax deductible.
- Itemizing deductions is the only way to deduct parking expenses. The 1040 long form or the 1040A are the only two forms that permit a taxpayer to itemize deductions. If you are self-employed, you are already required to use one of these forms. If you are simply taking parking expenses as an un-reimbursed employee, these forms may be new to you.
- Fill out form 2106 or 2106-EZ for un-reimbursed employee expenses. As an employee who was not reimbursed for parking fees or tolls, you need to complete form 2106. The expenses are subject to the 2% limit of your adjusted gross income. Many people discover that total cost of their parking expenses may not be enough to qualify for a deduction because of the 2% limit.
- Fill out Schedule C if you are self-employed. The Schedule C or C-EZ is the Profit or Loss from Business tax forms. Parking fees are added to the line for car and truck expenses.
What Others Are Reading Right Now.
Acting, comedy and strong spirits converge in Speakeasy. When host Russell Peters interviews entertainers about all sorts of topics, neither the drinks nor the conversation is wate …
6 Things You Think Your Girlfriend Cares About But She Doesn...
Guys, it may be time to refocus your efforts.
10 Red Flags That Kill Your Chances With Women
Wondering why that first date didn’t lead to a second? Read on.