Mileage Logs for Taxes and Reimbursements

What is a mileage log?

Mileage log is a place to keep track of your drives. In the past, this was probably a notebook, but now it's just as likely to be a tracking app on your phone or a spreadsheet.

Mileage logs are mostly used by businesses and self-employed drivers, but you will also need one to get a tax deduction for medical or charity-related travel.

Three reasons you may need a mileage log

Writing down drives is not exactly fun, but these records do provide excellent protection against unpleasant things in life — like tax penalties or being under-paid for mileage at your job.

Here are some common reasons to keep a mileage log:

1. Calculate tax deductions
Self-employed people can deduct business mileage and want to know how much they drove to get an estimate.
People who itemize their taxes may be able to deduct medical and charity-related mileage and want to know their savings.

2. Tax audit protection
Anyone who claims mileage on taxes will need to provide proof of this mileage during an audit.
While a mileage log itself won't prevent you from being audited, an accurate one can save you from penalties.

3. Ensuring fair mileage reimbursements
A clear, comprehensive mileage log means you get paid for every drive, if you get reimbursements.
For employers, an accurate mileage log prevents over-payments and helps build trust with employees.

What to record in your mileage logbook

If you drive for an employer, you should follow their policy and preferred format for mileage logs. Most will at the very least require location names, total mileage for each drive, and dates.

For claiming mileage deductions, your mileage log must have:

• The date and purpose of each trip, including specific addresses and business names
• Total miles driven
• Starting location
• Ending location

You should also record your odometer reading at the beginning of each year and the date when you first began to use this vehicle for business (this will help you fill out Schedule C of your tax return).

Mileage logs during audits

Here are the most common reasons IRS may reject your mileage records:

• Missing data or documentation
• Calculation errors
• Incorrect mileage rate applied
• Unusual patterns or changes
• Mileage much higher than the average for your profession/industry
• Prior audit history and issues
• Drives that appear personal making their way into mileage logs

You typically don't need to present a mileage log to the IRS unless you're actively getting audited, and you won't need to attach it to your tax return. But hold on to those records just in case.

How to keep personal trips out of your mileage logs

Chances are your business-use car also doubles as a grocery/pet/kid-hauler and weekend adventurer.

This is when tracking mileage gets tricky, especially if you work for yourself and have a flexible schedule without traditional work hours. It's easy for personal and business trips to blend into each other.

In that case — and in fact, in any case where mileage tracking is required, it's best to track and sort all those drives automatically. The easiest way to do that is with a handy app on your phone, like MileIQ.

• Quick-classify drives — classify business and personal drives automatically based on your driving habits
• Track drives automatically — nothing to write down or remember
• Get tax-compliant mileage logs — accurate, complete records for deductions or reimbursements