Does IRS Require Odometer Readings of Every Trip in Your Mileage Log?
Does IRS Require Odometer Readings? Depending on your situation, there can be different requirements, legal or otherwise, for record-keeping when it comes to your mileage log. In this article, we will review if it is a requirement of IRS to provide your odometer readings.
IRS mileage tracking requirements
IRS regulations and guidance provide that to qualify for the mileage deduction you are required to have a record of four facts when you drive your car for business:
You should have a written record of these facts made at or near the time the car was driven (at least weekly). This record can be an old-fashioned paper mileage log, but IRS regulations specifically provide that “a record of the business use… [of an] automobile, prepared in a computer memory device with the aid of a logging program will constitute an adequate record.” (IRS Reg. 1.274-5T(c)(2)(C)(2).)
You do not have to have your car’s odometer readings. This is nowhere in the tax law, IRS regulations, IRS publications or elsewhere is there any requirement. All that is required is an adequate written record of the distance you drove.
Which formats does the IRS accept?
Paper, diary, account book, digital spreadsheets, CSV files, PDF files, Xlsx (Microsoft’s Excel) are all accepted by the IRS. In other words, the format does not matter as long as the right records are present (see “Adequate records” above).
The IRS actually provides a paper template, but it is from a time before electronic mileage logs. We do not recommend that you try to keep records by hand, mostly due to how tedious it can get.
Your employer should inform you which records they need, and include the formats that they can process.
When can I use the standard mileage rate?
You can use the standard mileage rate if:
If you own or lease your vehicle,
You use the vehicle in your business,
You’re not using 2 or more vehicles at the same time,
You have not claimed actual expenses on the vehicle earlier, and
You keep track of your business miles.
Does the IRS require odometer readings every trip?
It is a myth that the IRS requires you to record your odometer at the beginning and end of your trips. There’s currently nothing in the law that requires you to log odometer readings except for the beginning and the end of each year, and when you start using a new vehicle. However, do keep in mind that your employer might ask you to record odometer readings more frequently.
What are the Mileage Tracking Requirements?
There are no requirements for how you track your mileage as such, except that you have to record the mileage of each trip. That means either
recording the odometer at the beginning and end of the trip, or
Tracking/recording your trips differently, for instance using your phone or a GPS.
The easiest way is probably to use a mileage app. There’s a whole range of apps that are designed to solve the exact problem of tracking and recording your mileage. You can sort for and use one of them.
Do I Also Needto Log Personal Trips?
If you drive the vehicle(s) for personal use as well, you also need to be able to prove the portion of use that is for business. You work this out as a percentage of miles driven for both business and personal use. That means keeping a log of all trips and then calculating the share used for business.
For How long Should I Keep Records?
It depends. That’s the best short answer we can give. The IRS statesthat: “Generally, this means you must keep records that support your deduction (or an item of income) for 3 years from the date you file the income tax return on which the deduction is claimed.”
The IRS also reminds us that a return filed early is considered filed on the due date. Keep in mind that different rules apply if your employer is relative.
What are the Standard Mileage Rates
For 2020, the standard mileage rates are:
57.5 cents per mile for business
17 cents per mile for medical
14 cents per mile for charity
What are the standard mileage rates for 2020, 2019, and prior years?
Rate per mile
The standard mileage rate is set by the IRS every year and this is the deductible rate for your drives.