Claiming Business Use of Your Car

If you are going to use the standard mileage deduction, you need to keep track of the business miles driven. There are two ways to prove to the IRS how many miles you have driven your car for business. Under either method it is very advisable to record the odometer reading on the 1st day of each year.

Keep a contemporaneous log each time you drive for business. This means record the mileage reading before beginning the business use and then record the mileage reading from the odometer when your business driving is finished. Record the date and the purpose of the business use. Incidental personal use during the business use (such as stopping for lunch) can be disregarded.
OR you can do what the IRS refers to as sampling that is representative of the use throughout the year. This method is particularly useful if your business driving is much the same from month to month or week to week.

Example. You keep adequate records (under method 1) during the first week of each month that show that 75% of the use of the car is for business. Invoices and bills (other business activities) show that your business use would be much the same for the rest of each month. Your weekly records are sufficient evidence to support use of 75% of your total annual mileage for business.

Please note that the standard mileage deduction method must be used for the first year in which you use the car for business.

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About Maesz

Glenna Mae Hendricks. She is an entrepreneur and income tax consultant, so we get lots of good tax tips from her. She is an oenophile (“look that up in your Funk and Wagnall’s,” she says), and a wine enjoyment teacher/guide who also writes wine notes at the Allen’s Retail Liquors site. Her political thoughts (and occasional outbursts of domesticity) appear at Old Feminist and Wild-eyed Liberal.