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Steve B
01-13-2011, 12:47 PM
For the last 5 years I've been designating my business mileage on my vehicles based on an estimate of the percentage of miles which are business versus personal. I did a little tracking for a few weeks to make sure my estimate was based on actual experience, but after that I have just used my percentage. I think at the time I was told it would be an O.K. way to do it (although the IRS would prefer a log book).

Anyway, I've since switched accountants and my new guy believes if I were audited that I would lose the mileage deduction.

I KNOW most people aren't actually filling out a little log book each time they run a business related errand. Is there an accepted practice that doesn't involve the log book?

B.T.W. - with my main work van, I'm going to switch it to "actual expenses" versus mileage so I can avoid the log book on that particular vehicle because it's 100% business. But, I have three other vehicles that are used for a combination of business and personal.

Business Attorney
01-13-2011, 01:30 PM
IRS Publication 463 says "You cannot deduct amounts that you approximate or estimate." You don't have to have a log book as such but your records must include actual mileage in some form. An estimate just won't cut it.

Steve B
01-13-2011, 03:46 PM
Yep, that's what I was told too. So, in actual practice, what are people really doing to track this? I'm guessing a lot are hoping they don't get audited.

billbenson
01-13-2011, 05:06 PM
But in this case, if they do an audit, what do they actually do? While they can say you can't use that deduction do they always act that way in an audit? I don't recall any horror stories about the IRS being nasty to honest people who either kept bad records or made an error.

I don't have to much to deduct. Some computer equipment, office supplies, hosting, Adwords. Hosting and Adwords I have receipts for. Computers and office supplies I have no idea. I tell my accountant to use a reasonable number that won't get me audited.

Steve B
01-13-2011, 08:42 PM
Exactly billbenson. I'm curious what the case history is for these situations. I guarantee 90% or more are not keeping actual records. That's probably why my first accountant didn't fight me on it and why my second accountant said he has no problem signing off on my return, but he also felt the need to warn me that I'm technically not doing it right.

Evan
01-14-2011, 11:46 PM
If you don't keep mileage records, they can disallow the entire deduction as you haven't substantiated the mileage. They may (MAY) allow you to deduct actual costs if those amounts can be proven.

Admittedly, actual mileage logs are rarely kept by clients, but I always tell my clients to only report to me mileage which you can substantiate.

Steve B
01-15-2011, 03:40 AM
I'm now clear on what they can do. I guess since I do everything else by the book, and since practically nobody gets audited anymore; I'll keep on doing what I have been doing. If I end up getting audited, I'll just take the chance that I lose the deduction. That will be less painful than keeping logs in 4 different vehicles for the next 20 years.

Thanks for the input.

Blessed
01-15-2011, 07:25 AM
I only have one vehicle to keep mileage records for and I don't do odometer readings - I simply write down where I was going and how many miles I drove. I don't know if those kind of records count or not, but that's what I've been doing for the past few years. Oh... and crossing my fingers, hoping I don't have to deal with an audit!

billbenson
01-15-2011, 09:31 AM
I just did a search for vehicle mileage tracker on G.There are a few GPS devices designed for this. The on I looked at didn't have a price but it might be worth a look. If its as simple as pressing a button before using it for business that would be pretty cool. Don't know if the IRS would accept that either, but I bet they would.

As to getting audited. I tell my accountant to prepare my taxes in such a way that I won't get audited. I'd rather loose a deduction than get audited.

Evan
01-15-2011, 09:48 PM
Don't fool yourself -- the IRS still is out there doing audits. Some things raise more flags than others. Mileage may not if it seems reasonable, but if it doesn't -- and you cumulate it with other issues, then you may run into problems.

For example, if the average driver goes 15,000 miles per year, and you're driving 40,000 miles a year, and you've had your car for 5 years -- while it may be right, I'm sure it seems a bit odd. Especially if your job isn't one your primarily perform on the road.

chrisaukcam
04-22-2011, 09:59 PM
I look at my reciepts and the town where I went to buy the goods.

I then use google maps to figure the milage to each town and put that in a spreadsheet.

Then each receipt goes to a town and I increment the number of trips to that town.

I do sports reporting so I also deduct the mileage to each event. since I save the story under the name of school or location of event then I can also go thru story by story and increment the number of trips to that town.

So for me using this spreadsheet system works. Not a true log, but I think that if I were audited that this would hold up.

jamesray50
04-23-2011, 02:35 AM
I have an app on my cell phone. I enter the odometer reading when I start the trip and again when I end. I've only been on one trip. I don't know what to do with it next, but I think I can down load it to my computer.

jdhopkins
09-01-2011, 05:40 PM
I keep an actual log book. It's a pain, but I do it for EVERY trip I make, even the short ones. You'd be surprised how quickly 3 or 4 mile trips add up!

AllCeasonsDesign
09-02-2011, 11:13 AM
I have an app on my cell phone. I enter the odometer reading when I start the trip and again when I end. I've only been on one trip. I don't know what to do with it next, but I think I can down load it to my computer.

Jamesray50 that app sounds interesting. What is it called?

huggytree
09-03-2011, 10:18 AM
i keep track of every mile i drive...i have a log book

i dont see what the big deal is...takes seconds to write the start and finish mileage and calculate the miles....when i fill up a page i pay myself

how much driving do you do in your personal vehicle?

jamesray50
09-04-2011, 04:28 AM
Jamesray50 that app sounds interesting. What is it called?

It's called Mileage Tracker. It was free for the Android.

GreaterVisibility
09-14-2011, 08:33 PM
We log our miles every day in the same book that we schedule everything. We then have a list of what we did that day, and the mileage. We just have a habit of writing down the beginning mileage each day. Then the next morning's mileage is the difference, showing how far we drove the previous day. If we switch vehicles, we just write down the starting mileage and note the difference in vehicle.

Nickie
04-06-2012, 10:02 AM
I have just downloaded an app for that! LOL I have an Android phone & downloaded a free app called MilesTrac. I put in the starting odometer & the ending odometer, destination & it has a spot for notes. You can then send it in an email each month & it puts it in an excel format.

AccountantSalary
04-08-2012, 10:26 AM
Either keep a record or don't declare the mileage. Every tax due date, my accountant keeps wanting me to deduct my mileage based on estimates, but I keep saying no. To me it's too much trouble to write such things down, and the deduction would be relatively small anyway that it's not worth the hassle for an audit.

queenvictoria
04-26-2012, 06:46 PM
Tracking mileage is just like any other deduction, it can be a pain to keep track of, but proper documentation might be worth doing. As a few other commenters said, not properly keeping track of this likely won't result in an audit, but it may if compounded with other mistakes. The Android app does sound like something useful, I hadn't heard about it until now. Also another reader said that 3 or 4 mile trips do add up quickly, which I can see being the case.

As you said, everything else is done by the book, so an audit probably isn't the issue, but if you find yourself traveling a lot, the deduction may be worth the extra hassle at the time. As we all know the IRS likes things done by the book, and at the end of the day they determine whether or not the practices are up to snuff.

I guess when it comes to keeping track of deductions I like to air on the side of making the IRS happy so that I'm not missing out on any extra cash that I may be entitled to. Then again if travel is not a huge deduction, losing that particular deduction probably won't cause an audit and thus is not that big of a deal. There are a few apps out there that may provide a simple solution that both you and the IRS may be happy with.

Leo
02-16-2016, 09:25 PM
I use Mileage Tracker for Android. I also have the Iphone version. They are free and work really well. You can also use the dictation feature, so you do not have to be bothered by typing the mileage numbers (I have big hands and a small phone... I hate typing).

Then I export everything into excel and upload the whole file as an attachment to the Quickbooks entry.

Freelancier
02-17-2016, 07:18 AM
You'd think someone would have already built an app where you press a button, tell it why you are making the next trip, and it tracks you via GPS and returns the miles traveled along with the explanation as a spreadsheet each day.

Evan
02-17-2016, 09:26 PM
You'd think someone would have already built an app where you press a button, tell it why you are making the next trip, and it tracks you via GPS and returns the miles traveled along with the explanation as a spreadsheet each day.

Your thought would be correct, and there are apps. As for it sending it to you daily, it doesn't do that.