Tax Tip Tuesday: Mileage Logs Must Be Kept at Least On a Weekly Basis
The business mileage deduction can be extremely valuable. For example, if you use the standard mileage method to calculate your deduction, you can deduct the 2015 mileage rate of 57.5 cents for each business mile you drive during the year. That means you get a $575 deduction for every 1,000 business miles you drive. But you can’t just get that deduction without proof and a recent ruling said weekly mileage logs may be required. You are not allowed to rely on estimates of your mileage or records you create out of thin air long after the fact when you learn you’re being audited. Rather, IRS regulations say you must keep contemporaneous records of your business driving. So what does “contemporaneous” mean?
Ideally, you should be keeping a mileage log for your business miles every day you drive for business. However, this is not absolutely required. The United States Tax Court says that it’s sufficient if you note your miles at least once per week.
In this case, a manager for a construction company claimed a $28,504 mileage deduction one year. He lost an IRS audit but won on his appeal to the Tax Court. The Court said that it was sufficient that once per week he recorded his business miles in a calendar, as well as the nature of his daily business activities and weekly travel. So, once per week is good enough to be “contemporaneous.” (Ressen v. Comm’r, T.C. Summ. Op. 2015-32.)
However, you’ll avoid problems with the IRS, if you do more than the absolute minimum and record your business miles each day, or use a mileage tracking app to automate the process and record each drive as it happens. This will also avoid forgetting about business miles and losing valuable deductions. It’s important to utilize an app that keeps IRS-compliant records, as not every mileage log will satisfy the IRS.