Last updated: February 22, 2023
If you use your personal vehicle for business purposes, the IRS allows you to deduct a part of the expenses incurred as a tax write-off. To claim these deductions, it is essential to keep a record of all business-related miles driven in your vehicle. This record is commonly known as a mileage log.
In this article, we’re going to show you all of the IRS mileage tracking requirements as well as answer the questions that usually come up during research on the topic.
What mileage log formats are accepted by the IRS?
The IRS accepts two forms of mileage log formats: paper logs and digital logs.
Paper mileage log
A paper log is a simple, written record of your business miles driven. It should include the date, the purpose of the trip, and the total miles driven for each business trip.
Digital (electronic) mileage log
We can say that this type of mileage log has become the “standard mileage log form” due to technological development. Digital logs must have the same information as paper logs.
These logs can be in the form of a spreadsheet (like Google Sheets / Excel) or a piece of mileage logging software – the latter is definitely the quickest and easiest way to log your miles in 2023 as your trips can be logged fully automatically via a mileage tracker app.
PRO TIP: Going with a digital mileage log, it is advised that you keep a mileage log backup by Google of it in case of any technical difficulties. Regardless of the mileage log format you choose, the most essential thing is that your mileage log is accurate, complete, and contains all the necessary information required by the IRS.
IRS requirements for mileage log
- The year-start & year-end odometer readings of your car
- The mileage for each business trip (e.g. 18.6 miles)
- The date, the starting & ending locations, and the purpose of each business trip
- The total mileage you drove during the year for business, commuting, and personal purposes other than commuting
PRO TIP: MileageWise automatically takes care of all requirements mentioned above. Its built-in IRS auditor function checks & corrects 70 logical contradictions in your mileage log (including these) before letting you print your mileage log.
The built-in IRS auditor and tracking of your personal trips are 2 of the methods by which MileageWise guarantees that your mileage log is 100% IRS-Proof.
Now let’s move on to the most frequently asked questions when it comes to the IRS’s requirements regarding your mileage log.
Odometer readings in your mileage log
The IRS does not require odometer readings for each trip in a mileage log. However, recording your odometer readings on the first day of each month does help increase the accuracy of your log and make it easier to verify your deductions in case of an audit. The important thing is to have a complete and accurate record of your business miles driven, including all required data.
You must keep your mileage log for the entire tax year, from January 1 to December 31.
PRO TIP: Do you want to backtrack your odometer reading for a past date? Use MileageWise’s Odometer Calculator.
Standard Mileage Rates & The Actual Expense Method
For the actual expenses method, you can only deduct the portion of the expenses incurred for business use. To calculate this percentage, divide the total business miles driven by the total miles driven during the year. To support business mileage deductions with the actual expense method calculation, you should keep all invoices, receipts, and a mileage log of all business miles driven.
How long should I keep my mileage records?
It’s recommended to keep your mileage records for at least three years, as this is the typical statute of limitations for tax purposes in the United States.
However, some tax authorities may audit tax returns filed up to six years prior to the current date, so it’s a good idea to keep your records for at least that long, just to be safe.
Do I have to include personal miles in the same mileage log as business miles?
Trips for personal reasons (such as commuting or personal shopping) are not deductible but are strongly recommended to be included in your mileage log.
Although the IRS doesn’t require personal trips in your mileage log, it’s strongly recommended that you include them because it will provide clarity for both yourself and the IRS, since you need to separate your total business mileage, total personal mileage, and total commuting mileage for the year.
Also, logging your personal trips boosts the proficiency of MileageWise’s built-in IRS auditor function, which you need for an IRS-Proof result.
NOTE: If you have a home office, the miles driven from your home to other work-related locations are deductible. In that case, make sure to deduct all of those trips as they fall in the business trip category.
What happens if I don’t have accurate records to support my mileage deductions?
In this case, the IRS may disallow your deductions, or worse, you may receive an enormous IRS fine of up to the 50% of your yearly income.
If you’re getting audited, there’s no time for hesitation, but no need to panic either: MileageWise’s Concierge Service will fix your mileage log, whether it’s only about filling a few gaps in your mileage log or recreating it from scratch for an entire year.
Download MileageWise’s automatic mileage tracker app from Google Play or the App Store & try it for free for 14 days. No credit card required!
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