I often get asked if you have to include odometer readings for every trip to get the mileage deduction. The IRS does not require odometer readings for every trip. Let’s go over the reporting requirements for mileage deduction.
IRS Reporting Requirements for Mileage Deduction
IRS regulations and guidance provide that to qualify for the mileage deduction you are required to have a record of four facts when you drive your car for business:
- time and date of the drive
- total distance of the drive
- destination of the drive, and
- business purpose of the drive. (IRS Reg. 1.274-5T(b)(6); IRS Publication 463, Travel, Entertainment, Gift, and Car Expenses, Table 5-1. )
You should have a written record of these facts made at or near the time the car was driven (at least weekly). This record can be an old-fashioned paper mileage log, but IRS regulations specifically provide that “a record of the business use… [of an] automobile, prepared in a computer memory device with the aid of a logging program will constitute an adequate record.” (IRS Reg. 1.274-5T(c)(2)(C)(2).)
You do not have to have your car’s odometer readings. This is nowhere in the tax law, IRS regulations, IRS publications or elsewhere is there any requirement. All that is required is an adequate written record of the distance you drove.
Before the year 2000, accurate GPS was not available to the general public. Nor were there mapping applications like Google Maps or mileage apps like MileIQ that could be paired with smartphones to provide accurate and reliable mileage tracking. The only practical way to track the distance of a drive was to use odometer readings, which would be recorded in a paper mileage log or other paper record.
Paper mileage log templates which you can find in IRS Publication 463, and many places on the Internet continue to include spaces to record odometer readings. All these templates were created long before GPS was widely available.
If you use a paper mileage log, you can continue to record your odometer readings. However, if you use an app like MileIQ that uses GPS to precisely track your mileage, there is no need to record your odometer readings for each trip you take or day you drive. The record provided by an app by like MileIQ is more than adequate by itself.
Indeed, arguably it is more trustworthy than an odometer reading noted in a paper mileage log. After all, you have to really drive your car for the app to record any mileage. On other hand, you could simply make up an odometer number and write it in a paper log without really driving anywhere.
There is one exception to the general rule that you don’t need odometer readings: You should make a note (or picture) of your odometer reading on January 1 and December 31 each year. This way you’ll know the total number of miles you drove your car during the year. You’ll need this information to figure your mileage deduction.
MileIQ’s blog does not constitute professional tax advice. You should contact your own tax professional to discuss your situation.