If you own and operate a vehicle for a business, or need one for your job, certain vehicle expenses can be deducted from your income. You can claim these expenses by use of a mileage rate, in which you multiply the miles driven by the rate or by claiming specific expenses and having the paperwork to support the claim. Not all costs associated with vehicle use are deductible.
If you don't use the standard mileage rate, you can deduct fuel, repairs, tires, insurance, tolls, parking, licenses, registration fees, depreciation and lease payments. If you use the vehicle for personal as well as business use, you can only deduct a proportional amount of expenses, depending on the percentage of miles driven for business. If you used the vehicle for business for 25 percent of the total mileage driven, you can only deduct 25 percent of the year's expenses.
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According to IRS rules, you may not deduct any fines you have to pay for moving violations or other civil infractions such as parking fines or tickets for failure to property maintain the vehicle. You may deduct legal fees and court costs associated with defending yourself in court as a business expense. If your license is suspended and you have to reinstate it, you may not deduct the fees associated with that process. The IRS allows you only to deduct expenses that are necessary for your income-producing activity, and speeding tickets do not qualify.
If you itemize expenses, do not include the cost of a speeding ticket. If you use the mileage rate and a percentage of vehicle use for business purposes, do not include the fine with the vehicle's expense account total. If the IRS asks for receipts and discovers you have rolled the ticket into your costs, you will have to revise your return, pay any back taxes due and possibly submit to an audit of your entire tax return.
The IRS does not allow you to deduct any fines or penalties, whether they are levied for a speeding ticket or for another prohibited activity and whether you pay them to a private or public agency. It doesn't matter if the fines came about while you were on personal time or while you were working or running your business. You also cannot claim any expenses that you incurred while carrying out an illegal activity. The IRS has an active enforcement bureau and can often bring a case of tax evasion more easily than the police can bring criminal charges.