Could Your Extra Money Be Nontaxable?

Carpooling

If you are involved in carpooling, you might wonder if it’s a tax deduction. It’s not. It’s also not taxable income if you are involved in a carpool situation in which you receive money, as it's not considered income. Let’s say you carpool every week so your coworkers aren’t spending their own time and money on their commute. You all benefit from being able to use the carpool lane, but you also receive payments from everyone each week for driving. They might all chip in to pay for your gas and excess mileage, for your parking and tolls, or even for your tires and other wear and tear. Although this might be a significant income, it’s not taxable, and you get to keep it free and clear since the federal government considers it a reimbursement.