The IRS provides taxpayers a choice between a flat rate per mile for transportation expenses and the actual cost of transportation based on the actual annual expenditures. If you choose the flat rate, maximizing those legitimate transportation deductions on your annual tax return are a simple matter of maintaining a complete and accurate mileage log.
Here are some rules to keeping a successful mileage log to prevent potential problems in the future.
Your mileage log should include all of the information that the IRS may require of you to prove your claims. This includes the date of travel, name of person driving (if more than one user of the vehicle), destination and the odometer reading at the start and finish of the trip.
Be sure that you are filling out the information on the mileage log when the travel is happening. The longer you wait to fill information into the log, the more likely that information will not be completely accurate. It may be best to keep the log on the passenger's seat or in the front console as a reminder to record the information at the beginning and end of each drive.
Check and double-check all information to be sure that it is correct. Do not guess about the information you're recording if at all possible. IRS laws require accurate information, not approximations. Also, filing false information on purpose is punishable by law and can be financially costly.
It is a good idea to keep your mileage log records for at least three years from the filing year, in case the IRS requires that you show proof of your claims.