Tax Guidelines

IRS Guidelines for Vehicle Expenses

Publication 463:Travel, Entertainment, Gift, and Car Expenses – including IRS Mileage Rate.

Here are key points relating to vehicle expenses:

  • Page 2 – If you use your car for business purposes, you ordinarily can deduct car expenses. You gener- ally can use one of the two following methods to figure your deductible expenses:
    • IRS mileage rate for 2010 is 50 cents/mile
    • IRS mileage rate for 2011 is 51 cents/mile
    • IRS mileage rate for 2012 is 55.5 cents/mile
    • Actual vehicle expenses which include: Depreciation, Licenses, Gas, Oil, Tolls, Lease, Registration, payments, fees, Insurance, Repairs, Garage rent, Tires, Parking fees
  • Page 26 – You should record the elements of an expense or of a business use at or near the time of the expense or use and support it with sufficient documentary evidence…If you maintain a log on a weekly basis that accounts for use during the week, the log is considered a timely-kept record.

Tax Audit

Actual tax audits do cause stress, expensive business disruptions, and additional accountant fees. And audits raise the threat of penalties which you may be assessed.

Using a mileage log reduces the likelihood of an audit, and ensures a successful outcome if an audit is done.

By tracking your business mileage you create a legitimate audit trail which justifies your claims for tax benefits. When your tax return is supported by legitimate documentation, you can prove your claim.

Legal Disclaimer

The information and resources presented here are for information purposes only. All information is general in nature. No one should act upon such information without appropriate professional advice and a thorough examination of the facts of the particular situation. Please consult the appropriate tax agency, a qualified accountant and/or other tax professional.