In a recent post about saving money on gas, I wrote that you should avoid speeding to get better gas mileage, as well as to avoid the expense of speeding tickets. That prompted one reader to email me and ask (rather sheepishly) if she could deduct the cost of a speeding ticket on her income taxes. She was driving between shops at the time she got the speeding ticket, so would it be considered a business expense?
Sorry to be the bearer of bad news, but speeding tickets and other fines are considered personal expenses by the IRS and they are not deductible. (Yet another reason to watch your speed.) Although I am not a CPA or tax professional, I consulted information from the IRS, and they are pretty clear on this.
A quick search of the IRS web site turns up Publication 463, Travel, Entertainment, Gift, and Car Expenses. According to this publication:
You cannot deduct fines you pay or collateral you forfeit for traffic violations.
The same rule would apply to other fines or tickets you received, such as parking tickets, even if you were on business at the time. Of course, you may deduct fees paid for parking (e.g., in a lot or garage or at a meter) when incurred for a business purpose.
So the lesson here is that breaking the law can quickly turn a profitable mystery shopping trip into an unprofitable one. Keep yourself safe and profitable by watching your speed and obeying other traffic laws, whether you are on or off the job.
Now, if you were hired to mystery shop the local police department, that might be a totally different situation. ;o)