How to Keep Vehicle Mileage Tax Records
The Internal Revenue Service allows taxpayers to deduct expenses related to using a car or truck for business purposes. While you may elect to write off the actual costs of using a vehicle for business, most people choose to take the standard mileage deduction, which in 2014 was 56 cents per mile. But you can’t simply guess at your business miles. The IRS requires you to keep records to prove the miles you deduct are accurate and were truly for business purposes.
IRS regulations for taxpayers who choose to deduct the standard mileage rate require a log showing “miles traveled, destination and business purpose.” You do not include this log with the tax forms you submit at the end of the year, but you must keep it as proof if the IRS questions your mileage deduction, or if you are ever audited. Your log should include enough information to satisfy the auditor. For instance, if you record that on Jan. 12, you drove 9 miles to a meeting with a client, be prepared to prove that the distance was actually 9 miles. And your stated purpose needs to include enough detail for the auditor to determine that this was a legitimate business trip.
The IRS also defines what it considers as deductible mileage for business. For instance, you can’t deduct the miles between your home and your place of business. But you can deduct the distance between two different places of businesses. You can deduct the mileage between your office and the offices of clients you call on, even if your office is in your home. If you travel to a conference or meeting or to take a seminar that will benefit you in your business, this counts as a business deduction. If your trip combines both business and personal purposes, you can deduct only the business portion of the trip. For instance, if you drive to the post office to mail documents to a client, then stop by the grocery store to pick up dinner, you may deduct only the mileage associated with the trip to the post office, not the grocery store.
Apps for smartphones, tablets and personal computers automate keeping track of business mileage. Such apps allow you to fill in key information, such as your destination and the purpose of your trip, and they will calculate the mileage. Many of these programs allow you to export the data into a spreadsheet. You can also install global positioning software in your car to keeps track of all your mileage. But, as a 2006 New York Times article on tracking software noted, software may be susceptible to glitches and hardware crashes, so regular backups of your data are crucial.
One of the simplest ways to track mileage is to keep a written log in your car -- in a notebook or on a mileage log form you print from your computer or purchase at an office supply store. Develop the habit of recording your beginning and ending odometer readings each time you use your car for business, as well as noting the business purpose of the trip. Fill in the information for each trip and total the miles at the end of the year. You may also use other documentation, such as print-outs of driving directions or maps, as further backup for your mileage deductions.