Tips & Tricks

Maintaining a Mileage Log

Mileage logs are a crucial aspect

of business tax deductions: mileage logs. The game has now changed.

In most court cases, taxpayers lose vehicle expense deductions because they cannot present a credible business mileage log. The IRS code forbids deductions for vehicle expenses when taxpayers cannot prove the mileage and provide an adequate record. 

Failing to maintain such records could lead to deductions that are less than the actual business mileage, potentially resulting in no vehicle deductions at all. In essence, having a mileage log is critical for both proprietors and corporate owner-employees.

What not to do

Take the case of Jim and Martha Flake (don’t judge the last name). During their IRS audit they submitted reconstructed calendars, odometer readings, fuel receipts, credit card statements, and other documents. But, they created the mileage after the fact, and it contained math errors, thus failing to establish the mileage, time, and purpose of each vehicle use. 

The court viewed their work and denied their vehicle deductions entirely. It only allowed what the IRS allowed. The key takeaways from this case are:

• Maintain a mileage log to substantiate your business mileage.

• Stay updated on the basic principles of tax law.

• Operate your business with proper books, checks, records, and receipts to verify income and expenses

If you need guidance on how to keep a comprehensive mileage log or require assistance with any other tax-related matters, contact us today!

Drop us a message and see how we can help you!

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