How to Track and Substantiate Business Miles

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The Car and Truck Expense Deduction can be an exciting and useful deduction for micro-business owners.

But it also comes with some pretty stringent substantiation requirements.

Records You’ll Need Under Either Method

For either method, you need a contemporaneous mileage log.

Contemporaneous simply means you’re recording the information at or near the time the trip occurs, rather than trying to reconstruct your travels months or years later.

Your mileage log should establish several important pieces of information:

  • The date of the trip
  • Where you went
  • The business purpose of the trip
  • The number of business miles driven

And while the mileage log is your primary record, I also recommend keeping documentation that further supports the trip.

Let’s Look at a Real-World Example

Imagine you’re a podcaster, and you agree to guest co-host another podcast as a way to bring more visibility to your own show.

You and the other host confirm that you’ll record the episode at their studio, The Beat Box, on October 1st, 2026 at 2 p.m. Their studio is 10 miles from your own.

On your mileage log, you would record:

  • October 1st, 2026 as the date of the trip
  • The Beat Box as the location you went to
  • Guest co-hosting for a promotional opportunity as the business purpose of the trip
  • 10 miles as the number of business miles driven
    • 20 if you drive round trip!

You’ll also want additional supporting documentation for the trip whenever possible.

Maybe you have emails confirming the date and location. Maybe there’s a calendar invitation containing the details.

Those records help corroborate what you entered into your mileage log.

In addition to the mileage log, you’ll want to retain:

  • Purchase documents, if you own the vehicle
  • Your lease agreement, if you lease it

And finally, there are a few key odometer readings you’ll want to capture:

  • The odometer reading at the beginning and end of the year
  • The odometer reading at the beginning and end of the trip

Standard Mileage Deduction

For the Standard Mileage Deduction, you simply multiply your qualifying business miles by the applicable mileage rate.

To substantiate your mileage, the records we’ve already discussed will more than suffice.

Unless, and here’s a hot tip to legally increase your Car and Truck Expense deduction, you pay parking fees or tolls in association with the business trip.

If you do, make sure to keep those receipts because you may deduct those expenses in addition to taking the Standard Mileage Deduction.

So if you pay a toll on the way to a qualifying business meeting or pay to park when you arrive, don’t overlook those expenses.

Keep the receipts.

Actual Expense Deduction

If you determine that the Actual Expense Deduction is more advantageous, the record-keeping becomes a tad more involved.

But don’t panic!

More involved does not mean overwhelming or impossible.

With the Actual Expense Deduction, you’re keeping track of the actual costs associated with operating the vehicle and deducting the business portion of those expenses.

You’ll want to retain records for expenses such as:

  • Gas
  • Oil
  • Maintenance and repairs
  • Insurance
  • License and registration fees
  • Parking and tolls
  • Lease payments, if you lease the vehicle

Stop for gas?

Keep the receipt.

Got an oil change?

Keep the invoice and receipt.

Got new tires?

Keep that receipt!

The moral of the story is: Always save something showing what the expense was, such as an invoice or receipt, and something showing that you actually paid it, such as a credit card or bank statement.

There is one particularly important point to remember: Even though you’re deducting actual vehicle expenses, you still need to track your mileage.

Why?

Because if the vehicle is used for both personal and business purposes, you need to prorate those expenses and deduct only the business portion.

For example, let’s say your total vehicle expenses for the year are $1,000, and you determine that you used the vehicle 30% for business and 70% for personal purposes.

Thirty percent of $1,000 is $300.

In this instance, you would only be able to deduct $300.

So choosing the Actual Expense Deduction does not mean you get to throw away the mileage log.

Quite the opposite, your mileage log now becomes the cornerstone of your defense in case of an audit.

How Long Should You Keep the Records?

Generally, you’ll want to keep these records at least three years from the date you file the return on which you claim the deduction.

Some vehicle records may need to be retained longer, particularly when depreciation or the vehicle’s basis is involved.

So when in doubt: Don’t throw it out!

And remember, your mileage deduction doesn’t begin at tax time.

It begins the second you get in the car.

Get Your FREE Tax Tribe Mileage Log

As a gift from me to you, I created a FREE Tax Tribe Mileage Log with spaces for the information we just discussed.

Use it to record your business trips as they happen and keep the records you need to substantiate your Car and Truck Expense Deduction.

Enter your email below and I’ll send it straight to your inbox.


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