43.11 Keeping Records of Business Use

Keep a log or diary or similar record of the business use of a car. You can also find an app for your smartphone to keep track of your business mileage. Record the purpose of the business trips and mileage covered for business travel. In the record book or electronic record, also note the odometer reading for the beginning and end of the taxable year. You need this data to prove business use. If you do not keep written records of business mileage and your return is examined, you will have to convince an IRS agent of your business mileage through oral testimony. Without written evidence, you may be unable to convince an IRS agent that you use the car for business travel or that you meet the business-use tests for claiming MACRS. You may also be subject to general negligence penalties for claiming deductions that you cannot prove you incurred.

Mileage records are not required for vehicles that are unlikely to be used for personal purposes, such as delivery trucks with seating only for the driver.

Employees using company cars are not required to keep mileage records if (1) a written company policy allows them to use the car for commuting and no other personal driving other than personal errands while commuting home or (2) a written company policy bars all personal driving except for minor stops, such as for lunch, between business travel. Owners, directors, and officers of the company generally do not qualify for exception.