The IRS Mileage Log Cheat Sheet

The IRS Mileage Log Cheat Sheet

Share: 

Business mileage is an important deduction for small business owners. The IRS allows business owners to deduct a certain amount per mile driven for business purposes. This can add up to significant savings on your taxes.

However, there are some strict rules about what qualifies as business mileage. The IRS requires that you keep meticulous records of your business mileage in order to claim the deduction. You will need to track the date, time, and purpose of each trip.

If you use your personal vehicle for business purposes, you can still claim the deduction as long as you meet the criteria set forth by the IRS.

However, you may want to consider using a dedicated business vehicle to make things simpler. This way, you won’t have to keep track of your personal and business mileage separately.

In this article, we’ll explain everything you need to know about IRS mileage log requirements.

Three Helpful Strategies for Business Mileage Deductions

There are two main strategies that you can use to maximize your business mileage deduction. First, you can try to group together as many business trips as possible into a single day. This will minimize the amount of driving that you have to do overall, and it will make it easier to keep track of your mileage.

For example, if you have several appointments in the same area, try to schedule them all for the same day instead of making multiple trips.

The second strategy is to use a GPS tracking device or app to automatically track your mileage. This can be a big help in keeping accurate records, and it can also help you remember which trips were for business purposes.

Finally, you can plan your trips in such a way that you minimize the amount of time spent driving on personal errands. For example, if you need to pick up some supplies for your business, try to do it on the way to or from another business-related destination. This way, you can kill two birds with one stone and save yourself some time and money.

What are the IRS’ Standards for Recording Mileage?

The IRS requires that you keep detailed records of your business mileage in order to deduct it from your taxes. This includes the date, time, and purpose of each trip.

You can use a paper logbook or an electronic spreadsheet to track your mileage. Whichever method you choose, just make sure that you’re as detailed and accurate as possible.

If you’re using a paper logbook, the IRS recommends that you include the following information for each entry:

  • The date of the trip
  • The starting and ending odometer readings
  • The reason for the trip
  • The total miles driven

If you’re using an electronic spreadsheet, you can simply create columns for each of these pieces of information.

No matter which method you choose, it’s important to keep your records organized and up-to-date. This will make it much easier to file your taxes and avoid any potential issues with the IRS.

What if I Use My Personal Vehicle for Business Purposes?

If you use your personal vehicle for business purposes, you can still claim the deduction as long as you meet the criteria set forth by the IRS.

However, you may want to consider using a dedicated business vehicle to make things simpler. This way, you won’t have to keep track of your personal and business mileage separately.

Does the IRS Mandate Odometer Readings?

The IRS does not require that you take odometer readings for your business mileage deduction. However, they do recommend it as the most accurate method for tracking your mileage.

If you choose not to take odometer readings, you’ll need to keep track of your starting and ending mileage for each trip using another method. This could include using a GPS tracking device or app, or simply estimating the mileage based on your starting and ending location.

Keep in mind that if you choose not to take odometer readings, the IRS may question your records if you’re audited. It’s always best to err on the side of caution and take odometer readings whenever possible.

What Other Documentation Does the IRS Require?

In addition to keeping detailed records of your business mileage, the IRS may also require other documentation to support your deduction.

For example, if you’re claiming a deduction for travel expenses, you’ll need to keep receipts for things like airfare, hotel stays, and rental cars.

If you’re claiming a deduction for the use of your personal vehicle, you’ll need to keep records of your actual expenses, such as gas and maintenance. You can either keep receipts or track these expenses using an app or spreadsheet.

The bottom line is that you should always hang on to any documentation that could support your deductions. This will make it much easier to defend your claims in the event of an audit.

It’s Important to Keep Copies of Mileage Logs and Other Documentation

Once you’ve created your mileage log and gathered all the supporting documentation, it’s important to keep everything safe and organized.

The best way to do this is to create a dedicated folder or binder for your business records. This way, you can easily find everything you need in one place.

You should also make sure to keep copies of your records in a safe, off-site location, such as a fireproof safe or storage unit. This will ensure that your records are always available in the event of an emergency.

What Counts as Deductible Mileage?

Not all mileage is considered deductible by the IRS. In order for your mileage to qualify, it must be related to your business, charity work, or medical appointments.

Here are a few examples of trips that would count as deductible mileage:

  • Traveling to and from meetings or clients’ homes or offices
  • Traveling to and from job sites
  • Traveling to and from the post office or other businesses
  • Traveling to and from conferences or seminars
  • Traveling to and from appointments with doctors, dentists, or other medical professionals

Keep in mind that the IRS considers your home office to be your primary place of business. This means that any trips you take from home to another location for business purposes would count as deductible mileage.

However, if you have multiple places of business, the IRS will only consider the miles you travel between them to be deductible. For example, if you have an office downtown and another in the suburbs, only the miles you travel between the two offices would be considered deductible.

What About Commuting?

Commuting is defined as the regular trip you take from your home to your primary place of business.

Unfortunately, commuting miles are not considered deductible by the IRS. This means that if you use your personal vehicle to commute to and from work, you can’t claim the mileage on your taxes.

However, there are a few exceptions to this rule. If you have more than one place of business, you can deduct the miles you travel between them.

You can also deduct the miles you travel from your home to a temporary work location, as long as the location is more than 50 miles from your regular place of business.

Final Thoughts

Mileage tracking may seem like a tedious task, but it’s an important part of running a successful business. By keeping accurate records of your business mileage, you can make sure you’re always getting the most out of your deductions.

If you have any questions about how to track your mileage or what counts as a deductible trip, be sure to speak with a tax professional. They’ll be able to help you understand the rules and make sure you’re taking all the deductions you’re entitled to.

 

If you want accurate bookkeeping for your business and to avoid IRS audits, consider hiring a reputable accounting firm. One of the trusted accounting firms in Florida is Swiftbooks, LLC. Call 786-204-2881 today to help your business keep its financial records straight!

Further Reading

Tips to Prepare your Small Business for a Recession

Small Business Bankruptcy Explained

How to Get Paid as an S-Corp Business Owner

Contact Us

Use the form to send an inquiry.

Call:

Write:

Contact Us

Use the form to send an inquiry.

Call:

Write: