Dasmah Accounting

Auto Audits: Mileage

Posted on August 11, 2010

We are going to split this topic into two sections, mileage and auto expense. This one is about mileage.

Client: How do I get a deduction for the mileage that I drive?
dasmah: How many miles did you drive for “business” purposes?
Client: Oh, about 5,000.
dasmah: Do you have a written record that can support that number?
Client: No, but that is pretty close to what I drove.
dasmah: How many total miles did you drive the car over the entire year?
Client: Oh gosh, I really do not know, maybe 12,000, but it is really hard to tell because I bought a different car in August.

If the above conversation sounds somewhat familiar, you are headed for a train wreck come audit time. If you want to claim mileage as a business expense, you have to take care of the details, i.e., mileage records.

Typically this blog is about providing you information, but this time I need your help. I am not into gadgets, cell phones that can do almost anything for you, or any other such devices. I am not completely in the dark ages. I do use a cell phone to call people. So is there anyone out there that has a solution for people who have lost the capability of writing mileage down when they start and again when they finish driving for business purposes that is simple and convenient?  I am not trying to be flippant here; I am serious. Is there some external device that can be activated separate from the odometer that could track the mileage? Maybe there is an “app” out there that could simplify things? The key to claiming mileage is the written record. So if you know of something, let us know, or maybe a system that works for you that you are willing to share.
I will wait and see you come up with and then answer the rest of the questions.
We need your help on this one!!

Paul Spears