Are Toll Fees Tax Deductible? What You Need to Know

Toll fees can be tax deductible. The deductibility of tolls hinges on the purpose of the travel, aligning with Internal Revenue Service (IRS) guidelines.

Eligibility for Deduction

Toll fees are deductible only if incurred for non-personal purposes. Personal commuting tolls, like home-to-work commutes, are not deductible, as this is personal travel. However, when travel is directly related to business, medical, moving, or charitable activities, tolls may become eligible expenses.

Self-employed individuals and business owners can deduct tolls incurred for business-related travel as ordinary and necessary business expenses. This includes trips for meeting clients, making deliveries, or attending work-related events. These business tolls can be deducted whether using the standard mileage rate or the actual expenses method, as tolls are separate from the standard mileage calculation.

Tolls are deductible as medical expenses. If the travel is for medical care, transportation costs, including tolls, are eligible. However, medical expenses, including transportation, are only deductible if they exceed 7.5% of your adjusted gross income and if you itemize deductions.

Toll fees may qualify as moving expenses. For active-duty military members moving due to a military order, tolls incurred during the relocation are deductible. This deduction applies to travel costs to the new home, including gas, parking fees, and tolls. For most other taxpayers, the moving expense deduction has been suspended through 2025.

Tolls incurred while providing services for a qualified charitable organization are deductible. This applies to unreimbursed expenses directly related to volunteering. Similar to medical expenses, these are claimed as itemized deductions, and tolls are deductible in addition to the standard charitable mileage rate.

Necessary Record Keeping

Maintaining detailed records is important for substantiating deductions. The IRS requires adequate records to support deductions. Without proper documentation, a deduction may be denied during an audit.

Records should include the date of travel, the amount of the toll, the location or route, and the business, medical, moving, or charitable purpose of the trip. This detailed information helps demonstrate that the expense was ordinary, necessary, and directly related to the deductible activity. Digital toll transponder statements can serve as documentation, providing a record of toll payments.

For those tracking mileage, a mileage log is recommended. This log should provide an overview of the travel, including starting and ending points and purpose, complementing toll receipts. Contemporaneous record-keeping, meaning recording the information at or near the time of the expense, is preferred by the IRS.

Reporting Deductible Tolls

After establishing eligibility and maintaining proper records, the step involves reporting deductible tolls on the appropriate tax forms. The specific form depends on the nature of the expense.

Self-employed individuals and business owners report business-related tolls on Schedule C (Form 1040), Profit or Loss From Business. These are listed under car and truck expenses or other transportation costs.

Tolls deducted as medical expenses or charitable contributions are reported on Schedule A (Form 1040), Itemized Deductions. Medical transportation expenses, including tolls, are part of the total medical expenses that must exceed 7.5% of adjusted gross income to be deductible. Charitable tolls are reported within the charitable contributions section of Schedule A.

For active-duty military members, qualified moving expenses, including tolls, are reported on Form 3903, Moving Expenses. The total allowable amount from this form is then transferred to the tax return. Under the Tax Cuts and Jobs Act, most employees cannot deduct unreimbursed employee business expenses, including tolls, as miscellaneous itemized deductions are no longer allowed through 2025. Exceptions are limited to specific categories, such as Armed Forces reservists, qualified performing artists, or fee-basis state or local government officials, who would use Form 2106.