Taxpayers can create a mileage log tracking the distances traveled for business purposes or the maintenance expenses for each business vehicle, according to Craig Woodman for Zacks Investment Research. These records should be recorded along with the date, and the log should begin in January at the start of each new year.Continue Reading
Before creating a vehicle log, taxpayers must choose whether to deduct that year's standard per-mile expense rate or simply deduct actual vehicle expenses, reports Woodman. A notebook, computer program or smartphone app may be used to track daily mileage for each business vehicle from the start of the trip to the finish. Tracking mileage throughout the year allows taxpayers to calculate their deduction by simply adding together the total mileage and multiplying it by the per-mile rate provided by the IRS. Taxpayers who choose to claim actual expenses do not need to track mileage but must track all expenses of operating the car, such as gas, toll costs, parking permits, vehicle repairs and vehicle depreciation.
Records should be consistent and accurate with a legitimate business reason recorded for each trip, explains Woodman. Any personal use of the vehicle must be excluded if the vehicle is used for reasons unrelated to business needs.Learn more about Taxes