IRS Audit of Mileage Deduction – How to Keep a Proper IRS-Compliant Mileage Log

IRS Audit Mileage
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One of the most scrutinized areas by the IRS is business mileage deduction. Why is this? Because most taxpayers lack the adequate records. Lack of adequate records is the most common reason businesses and individuals lose this deduction when they are audited by IRS. Also, you are not allowed to make estimates of your mileage. Even if it is clear that you use your vehicle for business during the year, the IRS and Tax Court will disallow you mileage deduction.

Are Your Business Vehicle Expenses Tax Deductible?

The ideal way to prove to the IRS how much you drove for business is to keep contemporaneous records. “Contemporaneous” means your records are created each day you drive for business, or soon thereafter. To keep track of your driving, you can use either a mileage logbook that you keep in your car or mile tracking apps that are available on Android  or Apple. To keep minimally adequate records according to the IRS, you must keep a record of:

  • All of your mileage record including business, commuting and personal driving
  • Date of each business trip
  • Destination of each business trip, and
  • Business purpose for each trip
  • ​Be sure to keep all tax records for at least 3 years from the date of filing. If you file a return before the due date, it will be treated as filed on the due date.

Need assistance setting up logbook for mileage deduction or have any other questions, please contact us at info@akifcpa.com or call us at 713-451-9700. 

Also read How can we deduct 100% of business meals and entertainment?  You might be interested in trucker owner operator tax deductions.

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