Small Business

How to Keep a Mileage Log the IRS Will Accept

If you drive for work — client visits, supply runs, job sites — those miles are usually deductible, and they add up fast. They're also one of the most commonly lost deductions, because the log either doesn't exist or wouldn't hold up. Here's what a solid log looks like and how to make it effortless. (This is an organizational guide, not tax advice — confirm specifics with your tax professional.)

What every entry needs

For each business trip, record:

• Date
• Business purpose — "client meeting, Acme Co.", "supply pickup"
• Start and end odometer (or the trip miles)
• Miles — calculated, not guessed

The pattern that fails audits is the year-end reconstruction: "I probably drove about 8,000 business miles." A contemporaneous log — entries made at or near the time of the trip — is the standard.

The standard mileage rate: one number does the work

Most solo businesses use the standard mileage rate: multiply business miles by the IRS rate for the year, and that's the deduction — fuel, maintenance, and depreciation are baked in. The alternative (actual expenses) requires tracking every vehicle cost and a business-use percentage; more work, worth it mainly for expensive vehicles. Whichever you choose, the mileage log is required either way — actual-expense users still need it to establish business-use percentage.

The three habits of a log that survives

1. Log at the wheel (after parking!) — a 20-second phone entry beats a memory exercise in April.
2. Note odometer readings on January 1 — total annual miles anchors your business-use math.
3. Keep the "why" specific — "errand" is weak; "picked up fittings for the Nguyen job" is solid.

Common mistakes

• Counting commuting. Home to a regular workplace is generally not deductible; travel between job sites generally is. Know your categories.
• Round numbers everywhere. Trips of exactly 10, 20, 30 miles all year read as estimates.
• No log until tax season. Reconstructed logs are the ones that get challenged.

Spreadsheet setup

Four columns — date, purpose, start odometer, end odometer — plus one formula: =IF(D2="","",D2-C2) for miles, and a running total multiplied by the current rate. Add a free phone-friendly version and you'll actually log at the wheel, which is the whole game.

Next: get the rest of your money organized with bookkeeping in Google Sheets.