Don’t let mileage deductions come back to bite you

By Eric Gelb
November 14, 2008

When it comes to tax deductions, solid documentation is vital. The lack of credible evidence can lead to the “red-flagging” of your tax return, a possible audit, and considerable taxation, interest and penalties. Deductions for travel, auto and entertainment are at the top of the Internal Revenue Service's target list, because many people either fail to keep the required documentation or take deductions that have dubious business purposes.

The most recurrent of these types of deductions is mileage driven for business, and typically, it is the most cumbersome to track. This is because data collection usually depends on something inherently faulty: human memory; remembering to check the odometer or log the mileage for your trip can often fall through the cracks.

In the glass industry, many outside sales representatives, in addition to some shop and franchise owners, rely heavily on personal vehicles for work. Tim Heinz, owner of Window World, Chippewa Valley, a window service franchise in Eau Claire, Wis., says he drives more than 50,000 miles a year.

“I used to track mileage by writing it on my schedule,” Heinz says. “It was time-consuming, to say the least. Whenever I forgot, I’d have to tie it in from the sale.”

The end result of “forgetting and estimating” mileage usually hits hard right around tax time when you’re trying to gather all the documentation for your deductions. At the end of the year, it took Heinz four or five hours to put all the information together. In addition to being time consuming, poor tracking leads to miles that you can’t deduct.

One solution is a product called the Mileage Logger from Vulocity, San Marcos, Texas, that can help glass sales representatives and business owners track their mileage. It plugs into the electric outlet in your car and tracks the mileage every time you drive. It then transmits your mileage data to a Web site; you log into the site with your own account, add notes as needed, and retrieve your trip log. The system also is tied into Google Maps so you can allocate whether the mileage you drive is for business or personal use. You can edit and print out reports from the Web site and use them to accurately substantiate your deductions. “At the end of the year I just run off the report,” Heinz says.

Find out more information about the Milage Logger at Learn more tips about easing tax filing, and calculating your tax rate at  


Additional mileage log options

The author, head of the Revenue Miner, Armonk, N.Y., is a certified public accountant, and a consultant and advisor for small and medium sized businesses. He can be reached at