Parking and tolls
Parking and toll charges incurred while traveling for business are 100% deductible whether you use the standard mileage rate or the actual expense method. Daily parking at your tax home (a regular office) is non-deductible commuting. Parking at client sites or temporary locations is deductible.
Vehicle registration
Vehicle registration fees are partly deductible based on business-use percentage. The "ad valorem" portion (based on the value of the vehicle) is deductible as a personal property tax on Schedule A — separate from the business deduction. Track both portions if you itemize.
Tolls vs commute
Tolls between your home and a regular workplace are non-deductible commuting. Tolls from a qualifying home office to anywhere business-related are deductible from the first mile. Tolls between two business locations are always deductible.
Recordkeeping
Toll-tag accounts (E-ZPass, FasTrak) provide downloadable transaction histories that are excellent recordkeeping. Tag the business trips in your mileage log and reconcile periodically.
Where it goes
Schedule C line 9 ("Car and truck expenses") if using actual method and the parking/tolls are line items there. Line 27 ("Other expenses") with a labeled detail if using standard mileage and parking/tolls are separate from the per-mile rate.
Worked example with numbers
Consider a sole prop with $100,000 in gross receipts and $30,000 in legitimate Schedule C deductions, including this category. Each additional $1,000 of qualifying expense reduces Schedule C net profit by $1,000, which reduces self-employment tax by approximately $1,000 × 92.35% × 15.3% ≈ $141, and reduces income tax by $1,000 × marginal rate. At a 22% federal marginal rate, the combined federal tax savings on each additional $1,000 of legitimate deduction is roughly $361, and state savings sit on top of that. The math is why disciplined categorization throughout the year pays for itself.
Common mistakes that disallow the deduction
The recurring ways this deduction gets disallowed in examination cluster in four categories: (1) personal-use expenses bundled with business (the deduction is disallowed entirely or apportioned downward); (2) inadequate substantiation (no receipt, no invoice, no business-purpose note); (3) the wrong line on Schedule C (not fatal, but it weakens audit defense); and (4) double-counting with another line (for example, deducting an expense on Schedule C and also on Form 8829, or as a personal itemized deduction on Schedule A). The fix in every case is contemporaneous bookkeeping and a clean chart of accounts.