Keeping a mileage log for tax purposes

I recently met with my tax accountant — early this year, as I had a hunch I would have to pay in. I’m self-employed, and have been paying taxes through payroll, but hand’t been withholding quite as many as I should have. That, and I haven’t done much work on the duplex this year, so my “loss” from the duplex venture isn’t quite as great.

One thing that could have helped a bit – keeping a better mileage log. Thus far, I’ve just been hanging onto receipts and tallying them all up into a spreadsheet at the end of each calendar year. From the list of receipts, I can then enter mileage to each store or supplier, and add up my mileage from there.

However, I know there are a lot of trips that go unaccounted for. For example, when I was installing a new light in the upstairs living room, I made trips to both Home Depot and Lowes to find the most attractive light fixture at the best price. With my current system, I’m only getting credit for the trip where I actually made the purchase.

Another argument for keeping an actual, current log — the IRS requires you to. If I’m audited, I need to have a mileage log to show my duplex-related trips.

So, this year I’ve vowed to be more organized. I have a spreadsheet on google documents where I’ll log all of my duplex-related trips, recording the date, destination, whether it’s for the rental unit or the whole duplex, and any special notes. For the sake of simplicity, I’m also keeping track of business mileage on the same sheet – I’ll sort it out at the end of the year. The nice thing about google documents is that I can edit the file from anywhere, and from any computer.

The trips I make are generally pretty short, so we’re not talking about serious cash here, but at 48.5 cents a mile, that added up to about $75 off my taxable income last year – and it could likely have been more if I’d been more organized.

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4 thoughts on “Keeping a mileage log for tax purposes

  1. Good for you! I am glad to hear you are keeping a log this year. Many people talk about it but few do. In an audit, it is usually one of the first places the IRS looks because it is usually easy pickings for them.

    Also, the mileage rate for 2008 is up to 50.5 cents.

  2. I couldn’t ever keep up with mile log books until I bought a gadget to do it for me. It’s called Mileage Logger and can be found at I never even have to touch it. It just sits in my car plugged into the lighter adapter. It uses GPS so when I go on line to look at my records they’re exact. Highly recommend it to anyone who needs a mileage log book.

  3. Would you be willing to post a link to a blank spreadsheet like the one you mentioned above? While I’m normally quite organized in terms of receipts, I’d like to have a form I could use to log expenses.

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