Mileage logs: How detailed do they have to be? Specifically for IRS purposes?

For example: If I make 10-20 stops on a route (let's say about 50-100 miles of driving), can I log the mileage at just the first and last stops, or am I required to log the mileage at each and every stop? Specifically for IRS purposes?

Thanks.

start and finish...

just keep a running spreadsheet....

I log from start to finish. If you keep your details so you can re-create the route if you need to (or save the Mapquest printouts) you don't really need to write down every stop. The entire route was for mystery shopping so as long as you don't deviate for a personal errand (subtract the extra miles if you do) you had one trip for the business purpose of mystery shopping.

On my spreadsheet, I list all my shops in date order of when I did them. On the line for the last shop of each route I record the total miles for that route. Those entries are summed in a column and that figure will go on the tax return for the year.

i really don't keep spreadsheets for my shops. how vital are spreadsheets for mileage purposes?

i keep the google route map print-outs. i also have shop invoices for each location visited, although the shops are not invoiced in the same order (or even day) that they're visited. i also have a monthly master log which lists each location.

I was just audited. In addition to the logs, they wanted third party proof of the starting and ending mileage for all vehicles. This was easy with oil change shop receipts, but it would not have been possible for me otherwise.

You don't need to use a spreadsheet necessarily. A notebook with columns you write the information in is fine. You just need to have some kind of record of what you earned, what you paid out, what you will be reimbursed, the mileage, and any other expenses you might have that relate to mystery shopping (recorders, cameras, printer paper, toner, etc.). If you have it all written down, you can check off when you are paid (or put the payments in a separate column so you can add them easily). You pay tax on the payments in the year you get them; you also deduct your expenses and mileage in the year you incurred them. At the end of the year, there will be a disconnect and you need to keep track of it.

Say you did $200 worth of shops in December, and paid out $25 that you will be reimbursed for. By the end of December you had been paid for $50 in fees and reimbursed $5 for those shops. You will take $55 into income and deduct the whole $25 you paid out on your 2013 tax return. In 2014 you will claim the other $150 in fees and the other $20 in reimbursements, without deducting what you paid out to get those reimbursements because you already deducted them in 2013 when you paid them.

You can also ignore the reimbursements totally, neither claiming the reimbursements as income nor taking the paidouts as a deduction, but I find it is cleaner to claim all the money I get from the company as income and deduct the expenses rather than explain to the IRS why the check was for $157.15 but I only reported $150 of it as income. Some MSCs include the reimbursement on your 1099; others don't.

The bottom line is for your tax return you need to come up with these totals: income received, expenses paid out, mileage driven, based on the year the money changed hands, not based on when you earned it.

Consult a tax preparer for more information; this is not meant to be a comprehensive description of everything you need to do when you are in business for yourself.

Oh, Michael is right -- any time you are claiming mileage for business you will need to be able to compute a percentage of business miles so always write down your odometer readings on January 1 (that's a week from tomorrow) and keep an oil change receipt near the end of the year to back it up. Some of your car loan interest will be deductible as will some of the registration fee based on that percentage, and this is true even if you take the standard mileage deduction.

If you drive 10,000 miles a year and 4,000 are for business, 40% of your car loan interest can be deducted as part of the Schedule C. Many people miss that deduction because generally car loan interest is not deductible so they don't think about it.

Michael C Wrote:
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> I was just audited. In addition to the logs, they
> wanted third party proof of the starting and
> ending mileage for all vehicles. This was easy
> with oil change shop receipts, but it would not
> have been possible for me otherwise.


what do you mean by third party proof? are you referring to mileage logs or something else?

dspeakes Wrote:
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> You don't need to use a spreadsheet necessarily.
> A notebook with columns you write the information
> in is fine. You just need to have some kind of
> record of what you earned, what you paid out, what
> you will be reimbursed, the mileage, and any other
> expenses you might have that relate to mystery
> shopping (recorders, cameras, printer paper,
> toner, etc.). If you have it all written down,
> you can check off when you are paid (or put the
> payments in a separate column so you can add them
> easily). You pay tax on the payments in the year
> you get them; you also deduct your expenses and
> mileage in the year you incurred them. At the end
> of the year, there will be a disconnect and you
> need to keep track of it.
>

i bought the mystery shopping bible program about two years ago, but it's very tedious keying all of those numbers. it might just be easier for me to write it in a columned journal. is this vital for the IRS in regards to mileage?

It just needs to be written down in some form. One thing that is important is that the writing down be done shortly after the trip was made -- IRS guidelines are within 24 hours. They don't want you sitting down at the end of the month saying, "Hmmm, I think that trip to Omaha was about 200 miles so I'll put down 207, and it was about 150 to Wichita so I'll put 153 for that one;" they want you to read the miles off your odometer and write them down before you go anywhere else in the car.

Can they prove you didn't? Of course not. Can you look the agent in the eyes and say, "Absolutely, I always write it down as soon as I get home"? That's up to you to decide. But re-creating them from Mapquest is fine too. If they can see the addresses on Mapquest match the addresses of the shop, it's not going to be an issue if you printed that out the day before the audit or had it stapled to your shop paperwork since you did the shop last March.

So if you realize you forgot to get the odometer reading from a week ago -- plot the route in mapquest, save the printout, and use their figures. Just be honest about what you do. Unless they think your return is totally bogus they have no reason to examine every detail (unless you're one of the unlucky ones who gets tagged for a line audit, where they do make you prove every figure on the return).

dspeakes Wrote:
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> It just needs to be written down in some form.
> One thing that is important is that the writing
> down be done shortly after the trip was made --
> IRS guidelines are within 24 hours. They don't
> want you sitting down at the end of the month
> saying, "Hmmm, I think that trip to Omaha was
> about 200 miles so I'll put down 207, and it was
> about 150 to Wichita so I'll put 153 for that
> one;" they want you to read the miles off your
> odometer and write them down before you go
> anywhere else in the car.
>

what if you use two different vehicles but you are only one driver? does this require two different mileage logs? or just one?

also, is it necessary to also log personal miles or just business miles in the odometer readings?

You need a log for each vehicle.

You don't need to log personal miles. It is assumed that all miles that are not business miles are personal. If you do a route and run personal errands on the way, subtract the personal miles from the total you put down in your shop records.

It's a good idea to make a note about any deviations from the route, just so you can remember what was going on that day.

vince Wrote:
> what do you mean by third party proof? are you
> referring to mileage logs or something else?

I get an oil change or service on my work vehicle at the beginning of the year. I'll get an oil change, tire rotation, etc. and the service work order from Bob's service center that will have my current mileage on it.( Example Jan, 4 , 2013, mileage 19,456). At the end of the year, or beginning of the next year, I will have another service done on my car and the work order will say Jan 2, 2014, mileage 57,987.) This counts as 3rd party proof as to how many miles were put on the car for 2013. Keep these work orders with your mileage logs. I do get service at least 3 times a year to keep my mileage verifiable when compared to my logs.

vince Wrote:
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> i really don't keep spreadsheets for my shops. how
> vital are spreadsheets for mileage purposes?
>
> i keep the google route map print-outs. i also
> have shop invoices for each location visited,
> although the shops are not invoiced in the same
> order (or even day) that they're visited. i also
> have a monthly master log which lists each
> location.


If you don't keep spreadsheets, an easy way to track mileage is to write it right on your calendar on the date you traveled, along with where you went. Then you can tally it up each month--at that point it's easier to enter into a spreadsheet you post to monthly instead of daily. And you can also write the mileage on your shop paperwork that you take with you--starting mileage, ending mileage, and total.

The IRS is required to give great deference to contemporaneous, written, record for mileage and other things. So, put a small notebook in each car that you drive for any MS. Log beginning and ending miles for each trip. You can deviate a couple of miles from an MS trip to do a personal errand without deducting that personal mileage, btw. I try to do 99% of my personal errands while enroute to/from MS jobs.

You do not need a spread sheet, just a contemporaneous written record and the occasional oil change receipt from a few times per year that shows the mileage as correlating with your mileage log.

I use the marvelous spreadsheet that Flash provided to me. I then use MapQuest and put in all my shops as a roundtrip. After doing my reports I enter the jobs on the spreadsheet and put the total roundtrip mileage on the spreadsheet for that day. That way it doesn't matter if I drive other miles out of my shop route for a personal errand. I believe the IRS will accept that mileage. I don't bother with the oil changes, depreciation, etc.

Changed my mind.

Edited 1 time(s). Last edit at 12/24/2013 11:26PM by jpgilham.

Those that use iphones can use the Automilez app. It follows you around, and at the end of the day it logs every stop,average speed and odometer readings. You can tweak it if there are errors and you can download into an excel spreadsheet. I use the app to report my miles for my sales job.

I have a log book in the house/office and keep track of my daily mileage of both vehicles.
start and end of each day and how much for personal business and how much for mystery shopping.
Of course some days one of the vehicles will not be use. Then on that day is stay blank.
It does not even takes 5 minutes a day to keep track.

optikdave Wrote:
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> Those that use iphones can use the Automilez app.
> It follows you around, and at the end of the day
> it logs every stop,average speed and odometer
> readings. You can tweak it if there are errors and
> you can download into an excel spreadsheet. I use
> the app to report my miles for my sales job.

Thanks, optikdave, love technology...just bought it and will start using it Jan. 1st.

walesmaven Wrote:
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> You can deviate a
> couple of miles from an MS trip to do a personal
> errand without deducting that personal mileage,
> btw.

Does that mean you can deduct mileage when the reason for deviation is because you're lost? (Say you're relying on GPS to get to a shop, and lose signal somewhere along the way.)

Edited 1 time(s). Last edit at 12/26/2013 02:26AM by Snoopy4678.

Cubbie, start now so you can get accustomed to it. Also it will crap out occasionally, so you go on hte website and recreate your day.

optikdave Wrote:
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> Cubbie, start now so you can get accustomed to it.
> Also it will crap out occasionally, so you go on
> hte website and recreate your day.

You're right! Thanks!

Hi,

I used to prepare and teach taxes. First, you can go to the IRS website and download the form for using your car for your job. It tells you about keeping records for mileage, oil changes, gas receipts, tires, and anything else with your car. First you need the amount of mileage on 1/1 each year. Also you need it on 12/31 each year! It is requested on the forms. They will want to know if audited. Ok, that being said, you can figure out your mileage from checking your oil changes and such. Also, I use mapquest to tell me what the mileage is if I foerget to set the trip odometer. Then, I record it on paper. Now I use another program online that the IRS recognizes. I upload all my receipts for shops, mileage, etc and it is ready for me at tax time. Also the program is a deduction. If you get others to sign up to use it you get a discount. You can record on a calendar if you don't use spreadsheets even. I hate spreadsheets since I am allergic to excel ;-). If in doubt, keep track of anything, or a receipt. You'd be surprised at the deductions. I am not giving advice! I am stating what I do...

I have the wrong smartphone! I wish I could change it. I hate mine and I had NO one to warn me.