Recording Vehicle Milage

DVS Hardscaper

LawnSite Fanatic
Location
County Jail
My accountant lady has always expressed the importance of tracking vehicle milage used for business.

Trucks over a certain factory GVW rating are excluded.

I have a buddy in the contracting business, he had a lot of trucks, and he does a lot of driving. About 8 yrs ago the IRS selected him through a random pick for an audit.

They got him on vehicle milage. And discredited $22,000 in gas and fuel expenses because he did not log his milage each day. So essencially - he paid for the gas and fuel twice.

If you're not logging your milage - you should be. It's a pain in the beehind and I always forget to do it. And if you're still not - as my accountant says "keep a calander for each year, as a "just in case".




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Last edited:

crazymike

LawnSite Senior Member
Location
Ontario
Don't you fill out a vehicle log book everyday?

It's mandatory here and is worth doing even on light weight trucks because MTO (DOT) is poorly trained and inconsistent. So it saves you a headache if you do get pulled over.
 
OP
DVS Hardscaper

DVS Hardscaper

LawnSite Fanatic
Location
County Jail
I'll have to talk to my accountant, but she goes by what I pay at the pump per year not accumulated miles.
Right, you can expense 100% of your gas you purchase. (what you pay at the pump) As long as it's used for business.

The IRS knows that we will take the kids out for ice cream, they know we'll buy gas for the family vacation with the business debit card. We think we're getting one over on the gov't, but they know exactly what we do, they've been around longer than we have.

So - they want to see that the pick up truck you're driving is used 100% for business. Because if you're using that truck to take your wife to get her nails done - they it's not 100% business use. What helps is if you have a personal vehicle that you drive and don't expense or depreciate.
 

Krafty

LawnSite Senior Member
Location
St. Louis MO
I can tell you first hand this is an excellent piece of advise!!! And let me tell ya writing down you went to pick up materials, or get gas does not cut it..... Address, dates, times, what you did there. Don't ask me how I know this because I am still bitter about my recent random selection....
 
OP
DVS Hardscaper

DVS Hardscaper

LawnSite Fanatic
Location
County Jail
I can tell you first hand this is an excellent piece of advise!!! And let me tell ya writing down you went to pick up materials, or get gas does not cut it..... Address, dates, times, what you did there. Don't ask me how I know this because I am still bitter about my recent random selection....

I can feel your bitterness!

I have not be audited.............................................yet.

Are you serious about the addresses, dates, and times, and what you did there? That seems a little extreme, it would take an auditor 7 months to confirm all my driving! My accountant handles audits, but she's never mentioned all those details. I have been doing a starting and ending milage.



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Krafty

LawnSite Senior Member
Location
St. Louis MO
I can feel your bitterness!

I have not be audited.............................................yet.

Are you serious about the addresses, dates, and times, and what you did there? That seems a little extreme, it would take an auditor 7 months to confirm all my driving! My accountant handles audits, but she's never mentioned all those details. I have been doing a starting and ending milage.



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7 months cough cough hahahaha lets try 10 months...... It was a very uh lets say enlightening experience. pm me if you want specifices, but yes it takes them a long time to go through every address, time, date, and reason, and let me tell ya it takes even longer to write all that down. and oh what was that about records only back 7 years and then you can pitch them.... not true
 
OP
DVS Hardscaper

DVS Hardscaper

LawnSite Fanatic
Location
County Jail
7 months cough cough hahahaha lets try 10 months...... It was a very uh lets say enlightening experience. pm me if you want specifices, but yes it takes them a long time to go through every address, time, date, and reason, and let me tell ya it takes even longer to write all that down. and oh what was that about records only back 7 years and then you can pitch them.... not true
I keep records for 10 years because the IRS has a chart on their website for how long they *recommend* you keep certain documents.

My accounting lady says there is no time expiration limit if you're suspected of commuting a crime. But she said she had a client the IRS wanted to do an audit for a period longer than 7 yrs prior and she told them no way, you can't. It seems they will try to get away with doing things that they can't do. I know an attorney handeling a case where an agent with the IRS tried to do something that is common knowledge that it's not allowed.
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Krafty

LawnSite Senior Member
Location
St. Louis MO
hahaha oh boy could I tell ya some stories now about things that most business owners THINK is proper tax procedure, that is not. We will leave that story for another day... The best part is 10 months, countless headaches, and many many sleepless nights later, the IRS determination is "no change"!!
 

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