Business Mileage Documentation Alert!

September 24th, 2023 at 7:41 AM

The tax law contains no reasonableness test for mileage.

In fact, tax code Section 274 specifically discards the reasonableness standard and puts in its place strict substantiation rules.

I recommend that you keep a mileage log for at least three consecutive months to prove your business-miles percentage. The three-month log concept comes from the IRS sample method described in its regulations. You then apply this three-month percentage to either

• your actual car expenses for the year, or
• your mileage for the year (if you deduct your vehicle using IRS mileage rates).

My message here is simple: keep a mileage log. You can use an app for this.

Mark S. Fineberg, CPA