Substantiating Business Driving the Right Way | Small Business Trends

Small business owners may use their personal vehicles for business driving. This is perfectly advisable from a cost-saving perspective, and it’s permissible for tax purposes too. The only catch: in order to deduct the cost of business driving, you need to substantiate business use of the vehicle. The tax rules are very strict on what this means. There’s a right way and a wrong way to do it.

Records must be contemporaneous

This means required information must be noted in a logbook, app, or other record at or near the time of each business trip in the vehicle. In one case, a contractor created his mileage record solely for use when he was audited; the notations weren’t made contemporaneously with the business use of his Mercedes. What’s more, his record was a calendar with minimal notations about business appointments; not good enough as you’ll see.

Read More

Leave a Reply

Fill in your details below or click an icon to log in: Logo

You are commenting using your account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s