Do you use a personal vehicle for business purposes? Are you maintaining detailed mileage logs? Mileage can account to a sizeable tax deduction, but if documented incorrectly, the cost can be even greater. If your books are subject to an IRS audit, your inadequate mileage log could cost you your deduction as well as time and money spent defending yourself in court.
Spend some time setting your records straight now to avoid owing the IRS later. To prove that you are entitled to a mileage deduction, you must document the following for each and every trip:
- How far you drove
- When you drove
- Where you drove
- The business purpose for which you drove
It can be a hassle when you are running late or in a hurry, but this information is absolutely necessary to justify your deduction(s). And while a good, old fashioned paper log will suffice, a lot of business owners are turning to mobile apps to stay more organized. Here are a few that you may want to consider…
- The Mileage Ace
- Mileage Log+
Visit americanexpress.com to learn more about other apps that can help you to track business expenses.
Are you using a mileage app? If you’ve found a good one, email David@DEKEbookkeeping.com. We would love to share your find with others!