If you own a small business and regularly put miles on your vehicle for business purposes — or even if you are an employee at someone else’s business and use your vehicle for regular business trips — you should be claiming those miles on your tax returns. But you must be able to prove every mile driven to the IRS, or else you’ll face potential hefty penalties.
Should you take the deduction for business mileage on your taxes, be ready to prove your mileage in the event of an audit. The IRS accepts proof in two forms: a daily log kept by you, as long as it has lots of information, or a mileage app that does the admin work for you.
If you’re creating a log of your business mileage, keep a journal in your car and immediately log each trip after the drive. You will need to include the date, your odometer reading at the start and end of the journey, along with the number of miles you’ve driven, and the business reason for the trip. It is also helpful to include the starting address and the destination address.
If you would rather rely on your smartphone, you can download one of several business apps for such a purpose. Many apps even let you log your personal and business miles separately. At Tropical Ford, you can find a massive selection of fleet vehicles to suit all of your small business needs.