What Are The IRS Mileage Log Requirements?

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What Are The IRS Mileage Log Requirements?

Your mileage log and mileage logs can lead to significant savings through the mileage deduction. But, what does the IRS require in your documentation? See how your mileage log books can help you avoid an audit.

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What Mileage Is Deductible?

You can deduct the mileage you put on a personal vehicle for business purposes. This mostly applies to 1099 workers but W2 employees may also be eligible.

Your business drives include trips to meet clients, pick up supplies, drives between offices and more. Importantly, you can’t deduct your commute. We’ve put together a list of what the IRS considers business drives.

Can I Claim Mileage On My Tax Return?

It depends. As mentioned, self-employed workers can always deduct mileage on their taxes. If you’re a W2 worker, you can deduct it if your total itemized deduction exceed 2 percent of your adjusted gross income.

How Do You Record Mileage For Taxes?

You need a record of your drives. People call this a mileage log, mileage logbook or something similar. Whatever you name it, it must provide documentation of the deduction you’re trying to make.

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Mileage Log Book: What Does The IRS Accept?

There are often questions about what the IRS will accept when it comes to proof of mileage. The documentation can often have many names: mileage log, mileage log book, mileage sheets or mileage books. Whatever you call it, know the IRS will accept digital versions, as long as it has the information covered previous section.

We advise maintaining digital mileage sheets because you may have to keep this up to five years after you file a deduction. A physical mileage book can easily get lost or damaged, which may cause trouble down the road.

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Gasoline Log vs. Log for Mileage

Sometimes, people will combine their gasoline log and their mileage log. You may want to do this for a variety of reasons: tracking your monthly spending or figuring out your real fuel efficiency and how that relates to your costs. If you plan to take the mileage deduction, you don’t have to keep a gas logbook.

How To Keep Track of Mileage for Taxes?

According to the IRS, your mileage log must include a record of:

  • Your mileage
  • The dates of your business trips
  • The places you drove for business
  • The business purposes for your trips.

The IRS also wants to know the total number of miles you drove during the year for business, commuting, and personal driving other than commuting.

By far the best 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.

A mileage tracker app like MileIQ may be one of the easiest ways to provide what the IRS wants. It automatically tracks, logs and calculate your mileage for each trip. It can also provide a mileage log that can stand up to IRS scrutiny.

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Common Errors For Mileage Log Books

There are many facts & myths about the mileage deduction. We’ve included a few mistakes people have made while using mileage logbooks below. Some of the common errors you see in a vehicle mileage log are:

  • Not including the business purpose
  • Using estimates instead of proper documentation
  • Errors from either negligence or just mistakes.

Remember, you don’t need to record your odometer reading with each trip but you do need proper documentation. Here are some mistakes that recently hit the Tax Court and led to

Vehicle Mileage Log Mistakes To Avoid

Jim Chapin, a California real estate broker, used his Toyota Sequoia SUV for his real estate business. He figured he drove a total of 11,135 miles for business one recent year. He deducted $5,309 for car expenses. The IRS audited him and disallowed the entire deduction. Not only that, it also added a 20 percent negligence penalty.

Jim appealed to the Tax Court and lost. Jim did not keep a detailed log of his drives each day, week, or month. He didn’t have a mileage tracker automatically creating records. He instead created a handwritten log when he learned the IRS was auditing him.

Jim also had an itemized list for the costs of fuel, insurance, parts and more. Yet, these lists didn’t include business purpose for the trips, nor reported the mileage traveled or the amount of each trip expense. The Tax Court found these records weren’t enough and denied his entire $5,309 deduction. (Chapin v. Comm’r, T.C. Summ. Op. 2014-31.)

Mileage Log Book Mistake #2: Not Keeping The Right Info

David Garza did a better job than Jim of creating his log. He kept records in a calendar planner book. He’d record his truck’s odometer readings at the start and end of each month. Some other months would including more readings and some wouldn’t. It wasn’t as consistent as a mileage tracker that logged all of his miles.

The calendar planner also had some personal notes, but didn’t include other vehicle expense info. David did not record any of his personal travel in the calendar.

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David claimed that he drove over 40,000 miles for business in 2010. This resulted in a $20,085 deduction. The IRS and Tax Court denied his entire deduction. His calendar was not a reliable substantiation for his claimed mileage expenses. The Tax Court said this mileage log needed the time, business purpose or other costs. (Garza v. Comm’r., T.C. Memo. 2014-121.)

Mileage Logs for Taxes: Details Matter

Even a mileage logbook that on its face looks pretty good may not pass IRS muster. A good case in point is Mr. and Mrs. Moore, who operated a real estate brokerage business in Texas. They each kept a mileage logbook consisting of 12 pages, one page for each month of the year.

Each page contained entries for each day of the month, including odometer readings, miles driven (sometimes designated as “commuting” and sometimes as “business”), and the purpose for the trips. The Moore’s each typically drove over 100 miles per day for their business and claimed a total $31,840 mileage deduction for the year in question.

Unfortunately, the IRS and Tax Court denied their deduction. The Court said that the logbooks were not reliable because they contained too many errors and questionable entries. For example, they did not contain the name of a single person the Moores claimed to have visited for their business.

Instead, the business purpose of their driving was stated in general terms, such as “OPEN–Review Task Log–Close Office” or “OPEN–Review Contract–Close,” or “Open–Update Website–Close.” (Moore v. Comm’r, TC Summ. Op. 2012-16.)

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Stephen Fishman

Stephen Fishman

Stephen Fishman is a self-employed tax expert and regular contributor to MileIQ. He has dedicated his career as an attorney and author to writing useful, authoritative and recognized guides on taxes and business law for entrepreneurs, independent contractors, freelancers and other self-employed people. He is the author of over 20 books and hundreds of articles, and has been quoted in The New York Times, Wall Street Journal, Chicago Tribune, and many other publications. Visit Fishman Law and Tax Files for more information on his work.
Stephen Fishman

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MileIQ’s blog does not constitute professional tax advice. You should contact your own tax professional to discuss your situation.