Taxpayer asks:
I’m getting mixed responses about being able to write off my parking expenses for work. I am a hair stylist and technically work as an “employee” at a salon (commission-based). I drive to work and park in a paid lot. I have receipts totaling over $900 from 2011 parking. Can I write off these parking expenses?
Thanks.
taxgirl says:
I’ve got bad news for you: fees you pay to park your car at your place of business are not deductible. Those are considered commuting expenses.
In contrast, you can deduct parking fees for business when visiting a customer or client. That might be why you’re get mixed feedback. If you had a number of clients that you visited – say, as a self-employed person – then your parking might be deductible. I say *might* because you have to be careful in terms of defining your place of business. Under the rules, you may not deduct the cost of parking at your regular place (or places) of business: routine trips to one client could be considered non-deductible depending on your facts and circumstances.
There is some good news for employees, however. Under the American Recovery and Reinvestment Act (ARRA), employees may exclude from income $230 per month in employer-provided parking benefits for 2011; that amount inches up to $240 for 2012. Employer-provided (or reimbursed) parking is considered a fringe benefit and is excluded from an employee’s gross income for income tax purposes and for payroll tax purposes under 26 USC § 132(f)(1). Qualified parking is defined under the Code as:
parking provided to an employee on or near the business premises of the employer or on or near a location from which the employee commutes to work … Such term shall not include any parking on or near property used by the employee for residential purposes.
Before you go: be sure to read my disclaimer. Remember, I’m a lawyer and we love disclaimers.
If you have a question, here’s how to Ask The Taxgirl.
