Keeping good records, and backing up these records, is imperative when dealing with travel expenses. Here’s a good example of what can happen if you don’t:
The case: “T” had several businesses for which he deducted substantial vehicle expenses against his business income. The IRS denied the deductions for lack of substantiation.
Held: For the IRS the taxpayer’s detailed spreadsheets of business use of his vehicles to support the expense deductions were not recorded when the trips were taken. They were assembled from memory only after he was audited, so the IRS questioned the vehicle deductions. Nor did he provide any calendars, logs, receipts or other documents to support the entries in the spreadsheets.
The court ruled that the taxpayer failed to keep contemporaneous records of the business vehicle use deductions required under §274, Disallowance of certain entertainment, etc., expenses, and denied all of them.
These days, it can be so much easier using a mileage app on your phone rather than keeping a log with pencil & paper! Here are a few worth looking at and remember the key is to pick one you find easy to use... And then remember to USE it!!
Everlance. This versatile app not only tracks your mileage but also helps you keep track of all your other business expenses. ...
Stride
TripLog
Hurdlr
MileIQ
[Hatte v. Commissioner, T.C. Memo 2019-109]