what are legally acceptable mileage records for taxes?

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i put a lot of miles on my vehicle with mystery shopping, often 100 miles on a day's route. this means that i want to deduct a large sum of money for the year at 55 cents per mile ($50 per trip on average).

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i'm aware of two recording methods, but maybe there are others:

1. a standard mileage log that logs individual trips. however, this can be falsified.

what would hold up under the scrutiny of an IRS audit?

2. gas receipts. however, these can't prove that the vehicle was strictly used or business. the vehicle is also used for pleasure.

what would hold up under the scrutiny of an IRS audit?

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what methods do you use? what is your experience?

Where the heck have you been?

vince,
The standard mileage log is accepted by IRS as long as it is "contemporaneous."

I have a mileage column on my shopping spreadsheet. I reset the trip odometer when I'm ready to leave home and record the mileage when I get back.

Contemporaneous I believe means you need to log it with 24 hours of driving it, not guess about it two weeks later and try to backfill (although I'm sure we all do that now and then).

But if you have other records, such as Mapquest printouts I believe those can be used to substantiate the deduction. I personally keep a day book in my purse and use my trip meter in the car to get the mileage. Then I write it in the book with either the name of where I went, or "Prescott route" and I have the details of where I went on the "Prescott route" in my Excel spreadsheet, and in the saved documentation I always keep for every shop. So if they ever wanted me to put together how those 232 miles came about I can show them exactly where I went, what I did, and what I got paid for the "Prescott route."

You really just need to have a record of where you went and the business purpose. As long as it shows the date, where you went, what you did, and the miles, it doesn't matter too much what form it is in.

Mapquest makes it very easy to generate trip records as long as you know where you went -- then the only burden you have is explaining what you were doing that day and how it relates to your business.

I use a combination of my Mapquest printouts and the Mystery Shopping Bible (Excel) to keep track of my mileage. With Mapquest, I plug in my destinations and plan a route. Then I hit the print button. I uncheck the "advertisement" box (makes the advertisement disappear) and then in the empty "notes" box, I type in the full date (Saturday, January 19, 2013: ) and then list each location or job assignment (i.e., A)Home; B ) MS #1 in Saturn; C) MS #2 in Mercury; D) MS #3 in Pluto; etc.) Mapquest prints out the miles, hours/minutes, and estimated fuel cost. It may not be exact, especially if you get lost or you hit a detour but it is close enough.



Edited 2 time(s). Last edit at 01/20/2013 01:24AM by Shop2LiveinFL.

To your benefit, the IRS rate is 56.5 cents per mile this year (not 55).

itsasecret Wrote:
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> You really just need to have a record of where you
> went and the business purpose. As long as it
> shows the date, where you went, what you did, and
> the miles, it doesn't matter too much what form it
> is in.

I tend to run a Google Map from home to my destination and back (or all of my destinations, if applicable), and then use that mileage for my run. That way, there's no need to delete extra miles for personal errands, and I can completely justify all miles reported.

I'm not proud of this, but I ran some longer, less profitable routes at the beginning of the year last year while I was still figuring things out. Because of that, I may even need to skip reporting some of my legitimate business mileage, in order to keep myself out of "hobby" territory. Needless to say, I'm making better decisions on the shops I take now.

I use the exact same method but MapQuest instead of Google. To me it is better to under report than over report mileage. So I lose a few miles for wrong turns, beats the hell out of trying to justify anything more to the IRS

Omgee Wrote:
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> I may even need to skip reporting
> some of my legitimate business mileage, in order
> to keep myself out of "hobby" territory.

Will someone type really s l o w l y and explain to me this issue about our businesses being classifed as hobbies? I've seen this topic come up before, but I guess I just don't understand it.

I have always made a profit, meager that it can be at times. My understanding, if you continue to show losses the IRS will no longer consider it a business. I think you need to show a profit 3 out of 5 years. Classifying it as a hobby then disallows business deductions. It seems that there can also be real issues with someone who has a full-time job or a spouse who is the main breadwinner. The IRS could then consider the losses are being used to offset the taxes of the full-time job.

Ok, thanks, Lisa. I understand it more clearly now.

I'm glad you do. I still don't completely understand it, lol.

LisaSTL Wrote:
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> I have always made a profit, meager that it can be
> at times. My understanding, if you continue to
> show losses the IRS will no longer consider it a
> business. I think you need to show a profit 3 out
> of 5 years. Classifying it as a hobby then
> disallows business deductions. It seems that there
> can also be real issues with someone who has a
> full-time job or a spouse who is the main
> breadwinner. The IRS could then consider the
> losses are being used to offset the taxes of the
> full-time job.

I definitely made a profit in real terms, because I get great gas mileage, my car is paid for, and I was lucky enough not to have very many maintenance issues last year. I also got lots of free food, most of which was tax-deductible, and that helped keep my bills down. However, if I were to charge the full mileage amount, I might be cutting it close, because of those few routes I did at the beginning of the year. I won't know for sure until I actually do my taxes, though.

As for the hobby thing, my understanding is pretty much the same: in order for it to be a business, it has to make money, on paper. I do wonder how *much* money must be made, though. Is there a threshold? If I made a dollar, does that count as a profitable year?

Do we get all of the mileage that we report back on our taxes? I'm excited that it is now 56.5 cents/mile.

I use google maps as well. I tend ot make personal trips while making these MS. As long as there is a log and it is written down somewhere then it is legal.

The IRS tries to prevent people from using a biz as a tax shelter, that is why there is the hobby and the actual biz.

If you do not want the IRS to highly consider knocking at your door you need to show a profit in any three out of the last five years. And yes, a profit can be any figure in the green. But, they still may, I suppose it depends on lots of other factors, including if the money you make would put you in a different tax bracket without all those write offs of the business they want to try and prove is a hobby.

The IRS will allow a biz to remain a biz if they can prove you are trying to make money! So, farmers generally do not fall under the 3 out of every 5 years - I know this growing up on a farm. This is why having a seperate checking account is helpful, having business cards, keeping good records. IF the IRS wants to come knocking and check it out they may and then they could approve you not showing an income ever after all those mileage deducations!

zeta,
You have to claim your mileage on Schedule C, where you report all of your MS expenses and income. It then helps to reduce your taxable income.

Thanks Wales for answering that question. It is something that I was toiling with. How did you do for the inauguration? Were you nearby?

LisaSTL Wrote:
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> Where the heck have you been?


lolol, i've been busy mystery shopping. occasionally, i work 15 hour days.

itsasecret Wrote:
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> But if you have other records, such as Mapquest
> printouts I believe those can be used to
> substantiate the deduction.

that sounds great. i'll just keep my google maps in my records for 2013. i used to dispose of them. then, i'll keep a dated mileage log right next to it.

Edited 1 time(s). Last edit at 01/25/2013 08:49PM by vince.

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Edited 1 time(s). Last edit at 01/25/2013 09:32PM by vince.

I use my actual starting mileage on my car, record the places I shopped, and my actual ending mileage on my vehicle. My parents are both CPA's and they told me this was the safest and most accurate way to do it. If you use Mapquest, lets say you got lost or found a short cut, your mileage may be different than what they give you. I do everything possible to leave NOTHING to scrutinize when it comes to Uncle Sam.

walesmaven Wrote:
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> You have to claim your mileage on Schedule C,
> where you report all of your MS expenses and
> income. It then helps to reduce your taxable
> income.

schedule c then. now i feel more confident to do my taxes this year over last. last time i got an extension because i didn't know what i was doing. but this year, i will probably get my taxes done early.

Flash wrote an amazing report on taxes and mystery shopping. It can be found as a sticky post on the "New Mystery Shopper" board. It's over a year old, but the concepts are still the same. Check it out if you haven't seen it.

[www.mysteryshopforum.com]

zeta,
As for the Inauguration, I was so sick with this nobovirus that I stayed in bed. The roads all overcity center were shut down and the Metro trains were packed. So getting around in DC central was crazy until well after the parade ended. But, from all reports, most of the visitors were in a very happy mood and all went off very well. Local law enforcement and public transit folks have gotten very, very good at coping with huge crowds. By all accounts they did us proud once again.

jrwb6e Wrote:
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> To your benefit, the IRS rate is 56.5 cents per
> mile this year (not 55).

55.5 cents for 2012

56.5 cents for 2013