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Dutchess_III's avatar

Can anyone here answer a tax question?

Asked by Dutchess_III (25566 points ) 2 months ago

My husband is supposed to keep beginning and ending mileage on the car when he goes out of town for business. Every year I buy him a new planner for that purpose. As a salesman, that is a LOT of mileage. However, he’s very hit and miss about keeping track. He was so bad about it last year that when I went through the planner he had only noted about 5000 miles, when in years past it’s more like 15,000. This is important. It’s the difference between paying in to the feds or getting a refund.

My question is, rather than making note of each individual trip (although it’s not like it’s HARD to do!) can we take our beginning miles and ending mileage for the year and will they give us an assumptive personal mileage amount that we can deduct from that amount? It would make my life soooo much easier if that’s all we really had to do.

Since we have relatively complete records from the previous years (thanks to extreme diligence on my part) we have a record of average personal mileage used.

Will that work?

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19 Answers

Pachy's avatar

I believe it will work fine. It always did for me. I can’t imagine IRS ever expecting for asking for mileage to the exact mile.

Adirondackwannabe's avatar

No, it will not work at all. If you’re lucky they might allow 50 percent of the mileage. If you’re unlucky they’ll deny all of it you can’t document. Then it’s up to you to prove them wrong.

Dutchess_III's avatar

@Pachy How much did they allow?
@Adirondackwannabe We could document other ways, via his company credit card purchases, for example.

WestRiverrat's avatar

This is a question best asked of a tax professional. I think in this case it may be prudent to talk to one.

My dad used to use an estimated mileage, not sure if you can anymore.

SadieMartinPaul's avatar

There’s no such a thing as “an assumptive personal mileage amount.” You claim the actual among of the business travel; there’s no allowance or safe harbor number. The burden of proof is on you, and you need to have written, substantiated evidence of your claim (yes, a contemporaneous record is more than sufficient). If you guessimate your husband’s business mileage, your deduction won’t hold up under scrutiny.

Concerning credit card receipts, there are two methods to calculate business travel. The first is the simplest – use the applicable standard mileage rate for each business mile driven. The second is to keep a record of every vehicle expense (gasoline, repairs, maintenance, insurance, inspections, registrations, car washes, etc.) and prorate the total by business vs. personal use. But, under either method, you need to have substantiation of the miles.

I’m speaking as a 30+ year tax CPA.

Pachy's avatar

Honestly, I don’t recall, been too long, but I think it was a pretty good chunk.

zenvelo's avatar

An alternative way: does he make the same trips over and over, even if he does 6 routes on a regular basis? Then sit down with a calendar and his computer email records or his sales records, and note every trip.

Then, using google maps, figure out the mileage for each trip. It will not have all of the little side trips to the 7–11 or a gas station or a lunch place, but it will get you most of the mileage.

That will be drawn from sufficient documentation to keep the IRS happy.

Tropical_Willie's avatar

IRS doesn’t like “best guesses”, the travel needs to be documented.
Can you recreate each and every day he was on business?
The 10,000 miles missing has to be documented, on a day by day basis. Use @SadieMartinPaul‘s suggestion to calculate every day’s travel. It may take several days or more of effort.

Dutchess_III's avatar

@zenvelo No….he’s all over the state.

@Tropical_Willie It’s frustrating. It shouldn’t have to take ME several days or more of effort (which it does every year.) It should just take him a few seconds of consistency. But, if I have to, as I said, he only uses his Am Ex card for business so if we have to recreate his travels we can.

I will ask our HR Block person about it.

Thanks you guys.

Tropical_Willie's avatar

It is worth ( assume 10,000 miles missing ) a $5600 deduction.
Don’t fake it! My uncle was an auditor for the IRS.
I’m not a CPA or tax lawyer.

Tropical_Willie's avatar

How many business miles has he driven so far this year?

Dutchess_III's avatar

Um….I’d have to go look at the log. Maybe 800?

Dutchess_III's avatar

I just realized…I CAN rebuild his mileage,by going through our bank statement, which shows locations of places where he ate and used his debit card. But that only takes me up to Sept 1, because he started a new job then and they gave him a company credit card and I don’t have access to those statements.

Tropical_Willie's avatar

Who is paying for his gas and vehicle? You said his company card was used since September, who paid before.

Dutchess_III's avatar

He changed companies. He had a car allowance at both jobs, but paid for his own gas at the old job. .... I didn’t even think of that. At his new job his new company pays for his gas. So we can’t deduct his mileage since Sept, can we?

SadieMartinPaul's avatar

@Dutchess_III ” At his new job his new company pays for his gas. So we can’t deduct his mileage since Sept, can we?”

You can claim the difference between the standard mileage rate ($.565 per mile in 2013) and the reimbursement from his employer. This is done on Form 2106; the amount carries to Schedule A and is subject to the 2% AGI floor.

The standard mileage rate is much higher than the cost of gasoline. That’s because the rate is intended to encompass all the costs of driving a car – gasoline plus depreciation (or lease expense), repairs, maintenance, insurance, registration, inspection, interest on a loan, etc.

As an example, let’s say that a car gets 30 mpg. The mileage rate for driving 30 miles, or using one gallon of gasoline, is 30 miles x $.565 = $16.95. Gasoline may be expensive these days, but it doesn’t cost that much! This is because the standard rate incorporates so much more than just the gasoline.

Dutchess_III's avatar

Thank you. You’ve been so helpful @SadieMartinPaul! Now, if you could only help me think of a way to get my husband to keep track of his mileage!

SadieMartinPaul's avatar

@Dutchess_III “Now, if you could only help me think of a way to get my husband to keep track of his mileage!”

I wish I could help you, but I, too, could use a class in Husband Management 101. :-)

Dutchess_III's avatar

I’m working on my masters in that major!

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