Business owners who want to claim a mileage deduction on their federal tax return must keep a log that records their mileage, the date of the business trip, the trip's destination and the purpose of the trip. To guarantee accurate records, business owners should write down the information for each trip the day that the trip occurs.Continue Reading
The Internal Revenue Service may deny the entire mileage deduction for the year if the mileage log does not include detailed, accurate information. A business owner cannot estimate his mileage; he must record the beginning and ending odometer reading, as well as the exact amount of miles traveled for each trip. When writing down the purpose of the trip, the business owner should include the names of the people he met and the exact reason for the meeting.
At the beginning and end of each year, the business owner should note the odometer reading for each vehicle he uses for business. If the logbook only records the miles driven each year, the business owner must claim the travel deduction that allows for a flat fee per mile driven. If he records the annual odometer readings, he has the option of deducting a percentage of the total expenses related to the vehicle instead. He can calculate this percentage by determining the amount of business miles traveled versus the total mileage for the year. Depending on the overall vehicle expenses for the year, this calculation method can yield a larger deduction.Learn more about Business Resources