Taxes

What Is A Contemporaneous Mileage Log?

Stephen Fishman
Tax expert and contributor MileIQ

The IRS wants you to keep a "contemporaneous" mileage log. But, what does that actually mean? Let's go over a recent court case to see what records you need to keep.  

What Does The Tax Court Want From A Mileage Log

You can't create a mileage log after you're audited. Sam Kilpatrick claimed he drove 8,867 miles for his business during 2009. He claimed a $4,477 mileage deduction. Kilpatrick never kept a mileage log to record his business driving. When he was audited in 2011, he provided the IRS with a calendar with the dates he claimed to have driven for business circle and printouts from MapQuest. The Tax Court found that these weren't adequate records to substantiate his mileage deduction. It said that this "mileage log" was created over two years after the driving was supposed to have occurred. To pass muster with the IRS, a mileage log must be "made at or near the time" that the driving occurred.    The IRS wants you to keep a contemporaneous mileage log. You should aim to keep records daily. But, you should at least keep records weekly. (Kilpatrick v. Comm'r, TC Memo 2016-166.)    Editor's Note: An automatic mileage tracking app like MileIQ qualifies as a contemporaneous mileage log and records have been accepted by the IRS.

Download MileIQ to start tracking your drives

Automatic, accurate mileage reports.

What The IRS Wants From Your Mileage Log

 The IRS wants you to record:  

       
  • Starting Odometer reading
  •    
  • Total business, commuting and non-commuting personal mileage
  •    
  • Dates of your business trips
  •    
  • Places you drove for work
  •    
  • The business purpose of your trips.

What are the Benefits of a Contemporaneous Mileage Log?

Taxpayers must maintain a contemporaneous mileage log, and you are missing out on potential tax savings by not maintaining mileage logs in this manner. According to the IRS, this is the only acceptable way to record business miles.


You can use two methods to calculate business mileage expenses, which include:


  1. Actual Mileage Expenses - Maintain receipts and documentation relevant to owning and operating a car, including repairs, maintenance, and depreciation. Add everything together to calculate your deduction.
  2. Standard Mileage Deduction - The new standard mileage rate has increased from 2019/2020 to 0.58 cents per mile in 2021/2022. Good mileage record keeping requires you to keep contemporaneous records.


Calculating your dollars per mile using the more popular standard mileage deduction requires you to take all your business mileage for the tax year, perform some simple sums, and claim your dollar reimbursement.


This is beneficial for both employers and employees. In short, the benefits of a contemporaneous mileage log count in both a legal and financial sense. Furthermore, reimbursements are deductible, so you don’t pay any tax on these payments.


What is the Best Way to Keep Contemporaneous Mileage Records?


Many taxpayers fail to follow the strict legal requirements in maintaining business mileage logs. Your lack of contemporaneous mileage logs could lead to you repaying any tax deductions you received for previous tax years if audited.


The IRS website states that logs should be recorded as close to the end of a trip as possible, either daily or, at worst, weekly. Any longer could jeopardize the validity of your contemporaneous mileage log.


The simplest way to keep a proper contemporaneous mileage log and avoid much of the tedium of compliance is to utilize free and paid technology. An app like MileIQ can track your mileage automatically and supply all the contemporaneous records required should the IRS request them.


An alternate method could involve GPS tracking. Like Uber drivers, employees would activate the GPS when on a business trip. Naturally, it requires honesty and integrity on behalf of employees. Plus, you will still need to log a business purpose.


Take advantage of the IRS-approved sampling method. The IRS permits employers to use mileage for regular routes.


For example, if you visit a particular destination daily or weekly, you can simply extrapolate the mileage for the entire tax year. If your schedule changes, you will need to update your regular route and alter your calculations.


By far, the easiest way to simplify your recordkeeping and make filing your tax forms simpler is to avoid using actual vehicle expenses. The standard mileage rate requires only a contemporaneous log. You aren’t required to maintain receipts for gas, repairs, or vehicle depreciation.


IRS inquiries have destroyed countless mileage claims. Vigilance is essential for ensuring you get to keep any expense deducted from your business activities. With so many fraudulent deductions, the IRS will examine not only your driving records but also the rest of your business activities to uncover any discrepancies in your mileage record keeping.

Learn more about the IRS requirements for a mileage log here. The IRS does accept mileage logs created by apps like MileIQ. Some find it much easier to rely on a mileage tracking app like MileIQ because it's automatically logging your trips every day.  

Download MileIQ to start tracking your drives

Automatic, accurate mileage reports.

How have you been tracking your miles?

Start tracking drives automatically with MileIQ!
Get Started