Can you deduct parking expenses on your taxes

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All Federal. Monday, April 22, Related Legal Headlines. By Marvin A. By Susan E. By Timothy Brechtel. By Jacob Mattinson. If the employer pays a third party for employee parking spots either directly or through reimbursement , the total annual cost of amounts paid for employee parking is nondeductible. If an employer pays more than the monthly limit per employee i.

The Notice also provides a four-step safe harbor method in determining how the disallowance of parking is calculated for employers who own or lease parking spaces used by their employees. If the parking facility owned or leased by the employer has a reserved area for employee parking, the employer must determine the percentage of the reserved employee spots compared to total parking spots, then multiply that percentage by the total parking area expenses.

Employers should next determine if greater than 50 percent of the unreserved parking spots are available for the general public. If the primary use of the remaining parking spots is for the general public, the remaining parking expenses remain deductible.

Employers who reserve parking spots for designated nonemployees, such as visitors, customers or delivery drivers will need to determine the percentage of such parking spots in proportion to the remaining parking spots.

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