The tax code allows deductions for qualified miles driven for business, medical, moving, and charitable purposes. But to claim this deduction, you must keep adequate records of actual miles driven. During an audit, this is an often disallowed deduction, although you actually drove the distance claimed. How can you make sure this doesn’t happen to you? Here are some tips on making sure your mileage log travels the distance.

Mileage log do’s

1. Keep a log. The tax code is clear on this point. You may not estimate your miles driven. You must support your claimed deduction, ideally with a detailed mileage log.
2. Keep separate logs for each deduction. Remember, you may deduct mileage for business, charitable purposes, qualified moving, and medical miles. It is best to keep track of each in a separate mileage log.
3. Make thorough entries. Note the odometer readings, date, miles driven, the to/from locations, and the qualified purpose for the trip.
4. Create good habits. Your odometer reading and miles driven should be noted as soon as possible after the event. Keep a log book in your car and note the daily mileage. Logs created after-the-fact with estimated miles driven could be disallowed during an audit.

But don’t do this

1. Don’t lose out on the extras. The deduction for miles driven is meant to provide a deduction for fuel, depreciation, and repairs. You can also deduct out-of-pocket expenses for tolls, parking, and other transportation fees. Keep a running total of these fees in the back of your mileage log.
2. Alternative business transportation deduction. When deducting business transportation expenses, don’t forget the miles driven method is not the only one available to you. You may also deduct your actual expenses, but how and when you make this determination is essential. In the initial year of placing your vehicle into service for your business, keeping track of and recording all your actual auto expenses is best. An analysis can then be conducted to determine which method is best to maximize your deduction.

Contact our RRBB advisors if you have any questions.