The question came up today as I was meeting with a new client about automobile expenses. The business owner has the option of either deducting the actual automobile expenses used for the business or using a standard mileage rate. Because automobiles can be used for both personal and business purposes, the IRS terms these vehicles as “listed property”. The owners must keep a representative mileage log. Even if the owner chooses not to use the standard mileage rate as a deduction, they still need to keep a log to document the business and personal use of the vehicle. The IRS will allow a mileage log to be completed using three representative months of the year. The mileage log has three documentation components. They are…
- The date
- The business purpose
- The actual business miles driven
