The Importance of Mileage Logs for Business Tax Deductions
If you own a business and use your personal vehicle for business purposes, you may be able to deduct the cost of those miles on your taxes. However, in order to claim this deduction, you need to keep a detailed mileage log.
A mileage log is a record of all the miles you drive for business purposes. It should include the date, starting and ending locations, and the purpose of each trip. You can keep a mileage log in a notebook, on a spreadsheet, or using a mileage tracking app.
The IRS has specific requirements for mileage logs. Your log must be:
- Timely: You should start keeping your log as soon as you start using your personal vehicle for business purposes.
- Accurate: You should record the correct mileage for each trip.
- Complete: Your log should include all of the required information.
If you don’t keep a mileage log, or if your log is incomplete or inaccurate, you may not be able to claim the business mileage deduction. In some cases, the IRS may even disallow all of your vehicle expenses.
The case of Jim and Martha Flake is a good example of the importance of keeping a mileage log. The Flakes were audited by the IRS, and they were unable to provide a credible business mileage log. As a result, the IRS disallowed their entire vehicle deduction.
If you want to claim the business mileage deduction, you need to keep a detailed and accurate mileage log. This will help you to substantiate your business mileage and ensure that you get the maximum deduction possible.
Here are some tips for keeping a mileage log:
- Start keeping your log as soon as you start using your personal vehicle for business purposes.
- Record the date, starting and ending locations, and the purpose of each trip.
- Use a notebook, spreadsheet, or mileage tracking app to keep your log.
- Make sure your log is accurate and complete.
- Keep your log in a safe place.
If you need help keeping a mileage log, or if you have any questions about the business mileage deduction, please contact us.