How to track business mileage for taxes — and keep the deduction

If you drive for your business, your mileage is money. But it's only money you keep if you can prove it. The tax code (specifically IRC §274(d)) holds vehicle expenses to a higher standard than almost any other deduction — and "I think I drove about 12,000 miles" is exactly the kind of answer that gets a deduction disallowed, with penalties and interest on top.

The good news: doing it right is simple once you know the rules. Here's the whole playbook.

Two ways to deduct your vehicle

You generally have two options:

• Standard mileage rate — multiply your business miles by the IRS rate for the year. Simple, and it's what most owners use.
• Actual expenses — deduct the business-use percentage of gas, insurance, repairs, depreciation, and more. More paperwork, sometimes a bigger deduction.

Either way, the foundation is the same: a mileage log. Standard rate needs your business miles; actual expenses needs your business-use percentage — and both come from tracking your trips.

What the IRS actually requires

Under §274(d), a deductible business trip needs contemporaneous records — kept at or near the time you drove, not reconstructed in April. For each trip, that means:

• The date of the trip,
• The miles driven (or start/end odometer),
• The destination, and
• The business purpose — who you saw, what for.

You also want your beginning- and end-of-year odometer readings, so your logged business miles reconcile against the total miles the car actually drove. That reconciliation is the single biggest thing examiners check.

The 5 mistakes that get mileage deductions disallowed

1. Reconstructing the log at tax time. A log built from memory in April isn't "contemporaneous," and it shows. Track as you go.
2. Suspiciously round numbers. Exactly 1,000 miles every month reads as an estimate, not a record.
3. No business purpose. "Errands" isn't a purpose. "Met client J. Smith re: Q3 proposal" is.
4. Claiming your commute. Driving from home to your regular workplace is personal, not business — a classic disallowance.
5. An unexplained odometer gap. If the car drove 18,000 miles but your log only accounts for 6,000, an examiner will want to know where the other 12,000 went. Gaps over ~10% are a red flag.

How to track mileage the easy way

You can keep a paper logbook in the glovebox, a spreadsheet, or an app — what matters is that it's consistent and contemporaneous. An app wins because it timestamps entries, does the odometer math, and produces a clean year-end report your preparer can actually use. (That's exactly why we built the Mileage Log and give it away.)

Whatever you use, build the habit: log the trip when you take it. Thirty seconds in the moment beats hours of reconstruction — and it's the version that survives an audit.

Frequently asked questions

What's the IRS mileage rate this year?

The IRS sets a standard business mileage rate each year. Rather than memorize it, let your log apply it — the Elev8 Mileage Log uses the current rate so your estimated deduction is always right.

Do I need receipts too?

For the standard mileage method, the log is the core record. If you use actual expenses, keep receipts for gas, repairs, insurance, and the rest as well.

What if I already missed part of the year?

Start logging now, and reconstruct what you reasonably can from calendars, invoices, and map history for the earlier part — it's weaker than a contemporaneous log, but better than nothing. Going forward, track every trip.

The bottom line

Mileage is a deduction you've already earned by driving — don't lose it to sloppy records. Track every business trip the IRS way, reconcile your odometer, and you'll keep every dollar of it. And if you'd like a professional to make sure your mileage (and the rest of your return) holds up, that's exactly what we do.