A Mileage Log for Tax Time That Holds Up

A mileage log for tax time records each business trip with its date, purpose, destination and miles, plus the vehicle's total miles for the year. Logs written when the trips happened hold up best. When a client has none, you can rebuild one from calendars and invoices, then use fuel lines on statements as a cross-check.

What does a mileage log for tax time have to show?

A mileage log has to show the business miles for each trip and the total miles the vehicle was driven during the year, along with when and why each trip was made. IRS Publication 463 lists these elements in its recordkeeping chapter, and a log that leaves any of them out invites questions.

The IRS Publication 463 on travel, gift and car expenses says car records should prove the mileage for each business use and the total miles for the year, the date the car was first used for business, and the business purpose of each use. It treats a record prepared on a computer as adequate, the same as a written log. It also says a record made at or near the time of the trip carries more weight than one written later, and that amounts which are approximated or estimated cannot be deducted.

In practice, each row of a usable log needs five things:

The values above are examples. The odometer readings are what give the preparer the total miles, and they are the item clients forget most often. Ask for a photo of the dashboard on the first business day of January each year.

Rebuilding a mileage log from calendars and invoices

A rebuilt mileage log is assembled after the year ends from records that carry dates and addresses: calendar appointments, invoices, delivery receipts and job sheets. It is weaker than a log kept at the time, and the preparer decides how far to rely on it. Still, a careful reconstruction is far better than a single estimated total.

Work in this order:

1. Export the client's calendar for the year. Keep only entries with an outside address.
2. Match each entry to an invoice or job record. An appointment the client billed for is good evidence the trip happened.
3. Measure each trip with a mapping tool, using the real start point that day. Record the measured distance, not a rounded one.
4. Mark every row as reconstructed, with the source document named. Do not present a rebuilt log as one kept at the time.
5. Hand the log to the preparer with a short note saying how it was built.

Reconstruction is billable work and often outside a monthly engagement. If your bookkeeping engagement letter does not mention it, quote it separately before starting, because a year of calendar matching can take hours.

Fuel lines on statements as a mileage log cross-check

Fuel purchases on a client's card and bank statements give an independent check on a mileage log. They do not prove business miles, but they show roughly how much the vehicle was driven, so a log claiming far more miles than the fuel could cover stands out at once.

Here is an example check for one month. The figures are illustrative.

The log claims well under what the fuel supports, so it passes this rough test. If the log had claimed 2,600 business miles, the gap would need an answer, such as a second vehicle or fuel paid in cash.

Fuel lines are easy to pull together when statements are already converted and categorized. In AutoBankConvert, client rules send fuel merchants to one account across every card and bank account, so a year of fuel lines is one filtered list rather than twelve PDFs to read.

What if a client kept no mileage log at all?

A client with no mileage log at all has two options at tax time: rebuild one from dated records, or claim actual vehicle costs only to the extent the preparer can support a business share. Either way, the preparer needs to hear plainly that no contemporaneous log exists. That is their call to make, not the bookkeeper's.

What the bookkeeper can do is gather the evidence quickly. Pull the fuel, repair, parking and toll lines from the statements, collect the year-start and year-end odometer readings if the client has service records showing them, and assemble whatever calendar and invoice trail exists. Then set the client up with a log for the new year, ideally a phone app that records trips as they happen.

Timing matters. The month before the filing deadline is a poor time to start a reconstruction. Add a log request to the January checklist you send clients, and use the tax deadlines bookkeepers plan around to set a date by which the log must arrive. For a client several years behind, mileage is one of many missing records; the work fits inside the larger plan for bookkeeping when a client has unfiled tax returns.

Mileage log entries that undo the deduction

Some mileage log entries weaken the whole log, not just the trip they describe. A reviewer who finds one obviously wrong row has reason to doubt the rest. Check each log for these before it goes to the preparer.

• Commuting recorded as business. Publication 463 says commuting costs are not deductible no matter how far home is from the regular place of work. The drive from home to the client's own shop each morning does not belong in the log.
• Identical round numbers. Twenty trips of exactly 25 miles look estimated, and estimates are not deductible.
• No purpose, or a vague one. "Client meeting" with no client named tells a reader very little.
• Business miles above total miles. It happens when a client logs two vehicles in one place. Keep one log per vehicle.
• Trips on days the books show the client elsewhere. An airline charge and a hotel bill on the same dates as a local log entry are a contradiction worth fixing.

A log that survives this pass is ready to send. Put it in the year-end folder with the fuel cross-check and the odometer photos, and AutoBankConvert can keep next year's fuel lines sorted as they arrive.