Deducting Mileage vs. Gas Receipts for Business

There are many phone tracking programs that create your log.

Most people just keep a calander and write the mileage in the day.

I’ll take that back, most people keep their mileage log on my office ceiling. I ask them how many business miles they’ve driven and they look up and then give me a number!

We have a small home based dog grooming/boarding business.
Instead of writing off one of our vehicles, my CPA said we should just write off X miles/month/year.
When we got audited about 8 years ago we had to go back and reconstruct the mileage we had written off for two years. We just went down to staples and bought a couple log books.

Our CPA went into the IRS office and dropped off the material they had requested. All the IRS auditor stated was, boy you sure go to the bank and post office a lot.

I believe this was a random audit pull. Luck of the draw.
Probably also because we write off our internet, land line phone, snow plowing and depreciate part of the house.

I bought a $33K 4WD tractor in December 2021. I asked him if I could depreciate that too. He said I would have to justify the hours used to maintain the driveway in order to operate the business. We chose not to bother.

Sometimes, it is better to not attract the attention of the IRS. My accountant also told me that they pull “X” amount of random audits every year. Once they fill that amount, the schedule is full. No more are pulled.
So, he advised the later you submit your tax return, the less chance you will get for a random audit.

IT has ALWAYS been more beneficial to use the actual EXPENSES.

Mileage rates NEVER were near the actual costs.

Keeping the records is more work, but I would bet that the ‘mileage rate’ would only cover about 1/3 of your actual costs.

A hard cover ‘account book’ LIVES on the front seat of both my vehicles. Along with a 3 ring binder with all info regarding title-registration-insurance-dog vaccinations (dog is always with me)—Horse ownership & registrations in truck that hauls them, etc.

Date of gas purchase—# of gallons & MPG—which tells me when I need a tuneup. Mileage goes down.

ALL other items-—adding oil—change oil/filter/air filter——adjust brakes—alignment—adjust steering box lash— change radiator fluid—new batteries—ANYTHING done to the vehicle is also recorded.

I still have those books back to 1980 when I became self employed doing accounting for a number of small businesses who never needed a full time bookkeeper.

Some records prior for my own info also still retained.

At one point, I had a 1965 Pontiac station wagon—1972 Honda 600 with motorcycle engine—1979 Buick station wagon—1976 Chevy 1 ton truck—1976 Navajo 2 horse straight load trailer.

Sold Honda first-—(39 mpg)—It couldn’t tow trailer.

Sold Pontiac next-—with OVER 444,000 miles on it-—guy restored exterior. Ran fine.

Sold 2 horse about 2012—had bought 4 horse in 2001. Still have 1 ton truck & Buick.

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