Mileage Logs and Vehicle Expense
Tuesday, January 31, 2012 at 10:16AM
Tiffany Davis in Bookkeeping Tips, Resources, Year End

Our vehicles have become an integral part of our lives so it makes sense that they naturally become an extension of our businesses.  Using your personal vehicle for business use can save your business the expense of purchasing a vehicle, but calculating the business deduction can be tricky.

The Internal Revenue Service allows you to deduct the actual expenses of operating your car or truck such as fuel and maintenance or for the actual mileage you drive based on the pre-determined standard mileage rate.

Both options mandate that a mileage log is maintained for each vehicle used for business purposes.

Actual Expenses

You must use actual expenses if you:

If you deduct actual expenses:

Standard Mileage Rate

You can take the standard mileage rate only if you:

If you take the standard mileage rate:

When is Transportation a Deductable Expense?

Generally, commuting to your regular office location is not a deductable expense.

The Internal Revenue Service has provided this chart as a guide.  Your specific situation may differ and it is recommended to consult your tax professional for guidance.


Both the standard mileage rate and actual expenses require the following to be kept.

Mileage Log

A mileage log will help you determine the business use percentage of your personal vehicle.  It should be maintained regardless of whether you plan to use the standard mileage rate or use actual expenses.

The log must include the amount, date, the business destination, and business purpose for the expense.  Here is an example provided by the Internal Revenue Service of a mileage log.

(click to enlarge)

Log Ideas

Many office supply stores sell mileage log books you can use to handwrite your details into.  Dome is a major manufacturer of these logs.

A digital iPhone solution we use is the Trip Cubby application.  Of course with a digital solution, we make regular backups of the log so as not to lose data.

Get Into the Habit

Each time you get into your car to take a business day trip, quickly jot down the date and odometer reading.  If your car has a trip computer, it can become a handy tool for tracking your mileage. Just do not forget to write the data down before it is erased.

An alternate idea if you are in a rush would be to take a photo of your odometer.  Most cell phone cameras will automatically time and date stamp the image.  Then you can put the log together when you get back to the office and have the time.

Be sure to write down your odometer at the beginning of each year.  This gives you a starting and ending mileage so you know your total miles driven for the tax year.

Once you get into the habit, maintaining your log will become second nature and calculating your expense at year end will be a breeze!


For more information, see the Transportation Chapter of Publication 463 on the IRS website.

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