Tax Saving Tip: Tracking mileage for a tax deduction

A vehicle mileage log is required for a tax deduction.

By Steve Shapiro

When it comes to your tax records, there’s one record that you really should keep, and it’s easily overlooked. It’s the mileage log. In an IRS audit, the mileage log often creates the first impression of your tax records. Whether you use the IRS mileage rate method or the actual expense method, you need a written record that proves your business percentage of use.

Various records can be used, but the IRS three-month sampling record is the preferred choice for those who know about it. With this method, you keep a mileage log for three months and then apply that three-month business percentage to either the miles you drove for the year (mileage method), or the expenses you incurred for the year (actual expense method).

The three months must be consecutive and must represent your driving pattern. Otherwise you must keep the mileage log for the entire year.

With respect to keeping your mileage log, technology has made your job a lot easier. You can find very affordable apps that work with your smartphone, such as Mileage Expense Log, Mile IQ, and Trip Log. These apps track where you go and where you stop, and that takes away a big part of the record-keeping hassle. Make sure you also add the business reason for the stops. This takes a few minutes, but it’s critical. Don’t skip this step.

If you would like an example of what a mileage log should look like, feel free to contact us at www.steveshapiroea.com.

About Steve Shapiro, EA Steve Shapiro grew up in a family owned business and understands the trials and tribulations of the small business owner.  He has extensive experience in credit, planning and helping people manage debt which led him to the tax industry.

Steve’s team of EA’s have helped hundreds of delinquent taxpayers settle their problems with the IRS. Find solutions to your business and personal IRS problems. Call today for a FREE Consultation. 888.490.9744 or visit www.steveshapiroea.com

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