Page 1 of 3 123 LastLast
Results 1 to 10 of 23

Thread: Tracking Vehicle Mileage

  1. #1
    Registered User
    Array
    Steve B's Avatar

    Join Date
    Aug 2008
    Location
    Louisville Kentucky
    Posts
    2,024

    Default Tracking Vehicle Mileage

    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.
    Steve B

  2. #2

    Default

    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.

  3. #3
    Registered User
    Array
    Steve B's Avatar

    Join Date
    Aug 2008
    Location
    Louisville Kentucky
    Posts
    2,024

    Default

    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.
    Steve B

  4. #4

    Default

    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.

  5. #5
    Registered User
    Array
    Steve B's Avatar

    Join Date
    Aug 2008
    Location
    Louisville Kentucky
    Posts
    2,024

    Default

    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.
    Steve B

  6. #6
    Mr. Tax Man
    Array
    Join Date
    Aug 2008
    Location
    Rhode Island
    Posts
    1,336

    Default

    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.
    Small Business CPA
    "A tax loophole is something that benefits the other guy. If it benefits you, it's tax reform."

  7. #7
    Registered User
    Array
    Steve B's Avatar

    Join Date
    Aug 2008
    Location
    Louisville Kentucky
    Posts
    2,024

    Default

    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.
    Steve B

  8. #8
    Registered User
    Array
    Blessed's Avatar

    Join Date
    Aug 2008
    Location
    Midwest USA
    Posts
    1,052

    Default

    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!
    ~Jenn
    Crazy Dog Creative: Graphic Design and Marketing

  9. #9

    Default

    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.

  10. #10
    Mr. Tax Man
    Array
    Join Date
    Aug 2008
    Location
    Rhode Island
    Posts
    1,336

    Default

    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.
    Small Business CPA
    "A tax loophole is something that benefits the other guy. If it benefits you, it's tax reform."

Bookmarks

Posting Permissions

  • You may not post new threads
  • You may not post replies
  • You may not post attachments
  • You may not edit your posts
  •