Stop Playing Audit Roulette with Your Mileage Deduction
You've probably heard someone say: "Just estimate your business miles at the end of the year- close enough!"
But here's the uncomfortable truth: that advice could cost you thousands of dollars if the IRS comes knocking.
What People Think the Rule Is
There's a dangerous myth floating around small business circles: "If you use your car mostly for business, you can estimate the percentage and you're good."
It sounds reasonable. It's what your neighbor does. Maybe even what your last accountant told you was "fine."
But it's not what the law actually says.
What the Law Actually Requires
Under IRC §274(d), the IRS requires contemporaneous records for vehicle expenses. This isn't a suggestion or a guideline; it's a strict requirement that has held up in court case after court case.
Here's what contemporaneous means in practice:
Date of each trip
Destination and business purpose
Miles driven
Recorded at or near the time of travel
Notice what's missing from that list? The words "estimate," "mostly," or "I'm pretty sure."
Why the IRS Targets Vehicle Deductions
The IRS knows vehicle expenses are where taxpayers get lazy. It's tedious work. It's easy to procrastinate. And reconstruction feels good enough when you're scrambling at tax time.
That's exactly why it's one of the easiest ways for them to disallow deductions.
In case after case, taxpayers have lost their entire vehicle deduction—not because they didn't use their car for business, but because they couldn't provide proper documentation. The business use was real. The deduction was legitimate. But without the log, none of it mattered.
What You Actually Need
The good news? Meeting the requirements isn't complicated once you have a system:
Use a mileage tracking app (MileIQ, Everlance, and TripLog are popular options)
Log trips in real-time, not months later during tax season
Record specific business purposes—"meeting" won't cut it, but "meeting with Client X to discuss Q4 marketing strategy" will
The key word is contemporaneous. That doesn't mean perfect, but it does mean timely and specific.
The Bottom Line
If you're deducting vehicle expenses without a proper mileage log, you're playing audit roulette. And in this game, the house always wins.
The standard mileage rate for 2025 was 67 cents per mile. If you drove 10,000 business miles, that's a $6,700 deduction on the line. Is it really worth risking that entire deduction because tracking felt like too much work?
Set up your tracking system today. Your future self and your tax deduction will thank you.
Here are some mileage trackers you should include in you tech stack:
MileIQ – Automatic trip detection, simple swipe-to-classify interface, good for set-and-forget tracking.
Everlance – Automatic mileage plus expense tracking, strong reports for taxes and reimbursements.
TripLog – Multiple tracking modes and robust reporting, good for heavier business use and small teams.
Stride – Free, simple mileage and expense tracker, popular with solo drivers and gig workers.
QuickBooks Self-Employed – Built-in mileage tracking inside an all-in-one bookkeeping and tax app.
Hurdlr – Real-time tracking of mileage, expenses, and estimated taxes, useful for multi-gig earners.
