Can Your Mileage Log Stand Up to an IRS Audit?

 

It’s the end of the year, you’re gathering your tax records and just realized you need to write down your mileage for the year.

You find some scribbled notes about a trip you took to the airport. You recall that every Friday, you drove to the printers in South St. Augustine. And you’re pretty sure you put in at least 500 miles per month driving around the Jacksonville area for other business purposes.

That should be good for the IRS, right? Nope.

If you record your mileage expenses for tax purposes, you’ll want to make sure your log records can withstand an audit. In recent years, there’s been an increase in IRS audits for reported mileage.

For small businesses, an accurate mileages log can produce significant tax savings through mileage deductions. So, it’s in your best interest to provide the accurate information the IRS requires for your mileage log.

IRS Travel Mileage Record Requirements

When it comes to detailed mileage log, the IRS is looking for detailed information. Thankfully, the IRS provides an example of the information they require at here.

What You Must Record:

  • Date of your business trip
  • Your starting point
  • Your destination
  • Purpose of your trip
  • Vehicle’s starting mileage
  • Vehicle’s ending mileage
  • Tolls and other trip-related costs

A Note on Starting and Ending Mileage

While IRS requests odometer mileage for each trip, they have proven lenient in just showing driving distance if the other requirements are met.

Don’t forget your total mileage during the year

We’ve seen reports of audits where the IRS examiner requests total mileage of the vehicle. If you’re a small business who uses your vehicle for both business and personal use, you’ll want to record your mileage starting on January 1 and ending December 31.

If you forget to record your mileage on January 1, you can look at your odometer reading recorded on your auto repair receipt, then make a guestimate.

How to Keep a Log

Make it a habit of recording your travel activities each day.

If you’re the traditional sort, keep a log book or calendar in your vehicle where you can jot down the detail of each trip.

If you like to get technical, then consider downloading a mileage tracking app on your smart phone. Many of these apps will track your miles plus starting and ending destinations automatically. All you need to do is provide the business purpose. At the end of the year, print out your records and you’re good to go.

If you want help in setting up a mileage log for your tax records, we’ll be happy to assist you. We’re just a phone call away when you’ve got questions: (904) 429-4588.

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