Small Business Tips
Business Driving – Mileage Log = No Deduction
Two recent Tax Court cases show why it’s so important to keep contemporaneous mileage logs when claiming deductions for business driving. “Contemporaneous” means updated at least weekly.
In the first case, the taxpayers lost a mileage deduction of over $22,000 because they lacked a mileage log or any other credible records of their business driving. They kept no log or other records during the year but later prepared a log when they appealed their case to the Tax Court.
However, the Tax Court held this was inadequate because it was created long after the driving occurred and failed to show the names and addresses of customers or the businesses that were visited or the business purpose of the trips. (Renner v. Comm’r., T.C. Memo. 2015-102.)
In the second case, in contrast, the taxpayer had his $28,504 driving deduction upheld by the Tax Court. He worked as a construction manager and kept a calendar that he updated weekly showing the miles he drove for business. He also had a logbook in which he recorded his daily business activities. The Tax Court held that together these were sufficient to back up his deduction. (Ressen v. Comm’r., T.C. Sum. Op. 2015-32.)
