In today’s world of virtual offices and multitasking may taxpayers use their care for business, charitable or medical transportation events. If the taxpayer decides to claim a deduction for such mileage are they inviting an IRS audit and possible, audit adjustment. The IRS has specific rules in place as to what types of driving are eligible for a mileage deductions.
The IRS is usually very strict in its documentation requirements for mileage deductions under IRS audit conditions. For this reason, taxpayers need to keep a thorough, accurate mileage log each year they attempt to claim a mileage deduction.
To meet IRS audit requirements the mileage log must include the starting mileage on the vehicle’s odometer at the beginning of the year and its ending mileage at the conclusion of the year. Each time the vehicle is used for business, charity or medical purposes, a record the following information is needed:
The mileage log must include the starting mileage on each vehicles’ odometer at the beginning of the year and its ending reading at year end. Each time the taxpayer utilizes a vehicle for business, charitable or medical purposes, a record the following information must be made in writing. The log also must contain the date, the starting point, the destination, the purpose, the starting odometer reading, the ending odometer reading and any related toll or parking cost of each trip.
The IRS audit will accept a mileage log in a notebook and update it by hand, or use a spreadsheet used continuously to track the data. These, however, can be tedious and difficult to keep complete and accurate in the hectic world in which we live and work
There are apps that help taxpayers meet the strict IRS audit requirements C/Net’s website https://www.cnet.com/how-to/3-apps-for-tracking-your-mileage/ lists three of these popular apps MileIQ (Android, iOS), Mileage Expense Log (iOS) and TripLog (Android, iOS).
I utilize MileIQ and find it easy to use and it has helped me maximize my mileage deduction. While there is a charge for the Mile IQ app and the company offers CPA’s the ability to provide a discount code to their clients. Taxpayers can save 20% on mileIQ by utilizing the discount code “MSAR483A”
The IRS routinely audit taxpayers claiming a business mile deduction. Consequently it is import to remember the following rules regarding business mile deductions. The daily commute from the taxpayer’s home to a permanent work location does not qualify for a business mileage deduction. On the other hand, if a taxpayer needs to travel to a second company location that is the primary office, a mileage deduction is appropriate.
Taxpayers can also take a mileage deduction for travel to and from business conferences, off-site meetings, and business-related events, including lunches or dinners with current or prospective customers. Mileage for travel to visit customers or to run business-related errands, such as obtaining supplies or getting documents notarized or trips taking shipments to the post office or UPS also qualify as business miles. The mileage apps make it easy to classify trips appropriately.
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