Monday, October 5, 2020

Business Mileage

Business Use of a Car:

You have to document your business miles for the IRS in order to take a tax deduction. Documentation can be provided by a mileage log, an account book, diary, trip sheets, expense reports, or other similar evidence. I use the mileage record in Quickbooks for my business. You can buy a mileage log at an office supply store, and there are also many aps now that you can get. The Cohan rule that allows taxpayers to estimate some business expenses is not allowable for business mileage. Commuting between your home and your regular work location is not business mileage. 

Upon audit, the IRS will just throw out an estimate of business mileage without supporting documentation. A contemporaneous written record is the best defense showing the specifics of date, mileage and business purpose. 

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