Costs
Part of IRS Mileage Rates and Logs: Methods, Business Miles and the First Year Choice
Log, category, method: the three passes of a mileage rates review
Mileage claim review in three passes: read the log first, then the category of each trip, then the method the vehicle is on, and know when to stop.
Reviewing a vehicle claim is not recalculating it. It is asking whether the claim could be explained to a stranger from documents you already hold. If it could, the arithmetic is a detail. If it could not, better arithmetic will not save it.
This page is a review method: what to look at, in what order, and where to stop and hand the question to someone licensed to answer it.
What to take away
- Review the record before the number. A defensible log makes the calculation trivial; an indefensible one makes it pointless.
- Review your own position first, then the preparer's work. They fail in different places.
- Three things get checked every timewhich miles, which method, which year.
- No figure is reviewed here against a rate, because no rate appears on this site. The IRS publishes it by year, and a CPA or enrolled agent judges the position itself.
Step one: review the record
Open the log and read five entries at random from different months.
Five-entry log spot check
- Destination clear from the entry
- Business purpose clear without memory
- Date sits near the trip
- Miles look measured, not round
- Odometer start and end recorded
Five clean entries out of five suggests the rest are fine. Two clean out of five is telling you about the whole year, and the honest response is to reduce the claim to what the record supports rather than to defend the file.
Then check the two numbers that anchor everything: the odometer at the start of the year and at the end. Without them, the business share has no denominator, and under the actual expense method the share is the whole calculation.
Step two: review the category of each trip
This is where claims are won and lost, and it takes an afternoon at most.
Trip category: ask vs. error
Trip type
- Home to regular workplace
- Is it commuting?
- Between work locations
- Did both ends serve business?
- From a home office
- Is home the principal place?
- Mixed business and personal
- Which part was which?
- Parking and tolls
- Recorded separately?
Ask
- Home to regular workplace
- Long drive called business
- Between work locations
- None; ordinary case
- From a home office
- Assuming a desk settles it
- Mixed business and personal
- Claiming the whole trip
- Parking and tolls
- Folded into per-mile rate
Common error
- Home to regular workplace
- Between work locations
- From a home office
- Mixed business and personal
- Parking and tolls
Review the category of each trip
| Trip | Ask | Common error |
|---|---|---|
| Home to a regular workplace | Is this commuting? | Treating a long drive as business because it was long |
| Between two work locations | Did both ends serve the business? | None; these are the ordinary case |
| From a home office | Does the home actually qualify as the principal place of business? | Assuming a desk settles it |
| Mixed business and personal | Which part was which, and was it recorded? | Claiming the whole trip because business came first |
| Parking and tolls | Recorded separately from the miles? | Folding them into the per-mile calculation |
The home office question deserves its own look, because the whole category of trips from home turns on it. The test is written out in Publication 587. Read it against your actual arrangement rather than against your description of it.
Step three: review the method
Three questions, all answerable from documents.
Method review: three questions
Which method this year and in the first business year?
prior returns answer it, not memory
check ownership, lease, depreciation restrictions
Review the method
- Which method is this vehicle on, and which method was it on in the first year it was used for business? The prior returns answer this. Memory does not.
- Is a switch permitted for this vehicle this year? Restrictions exist and they depend on how the car is owned, whether it is leased, and what depreciation has been claimed.
- If the standard rate is being used, has anything the rate already covers been claimed separately as well? That is double-counting, and it is easy to do by accident when a bookkeeper categorizes fuel out of habit.
Reviewing a preparer's work
You are not checking their arithmetic. You are checking that they were given the right material and applied it to the right facts.
Four questions for the preparer
- Which method per vehicle, and why
- What supports the business-use share
- What they would produce if questioned
- What facts they assumed rather than saw
A good preparer answers all four in a few minutes and is not annoyed by the asking. The business deductions review approach applies here too: a supported claim and an allowed claim are two different things, and the professional decides the second.
When to stop and get help
- The vehicle changed hands, changed use, or was leased partway through the year.
- Depreciation has been claimed on it and you are considering a different method.
- The log is thin for part of the year and you are unsure what may honestly be claimed.
- An entity owns the car and an individual drives it. The IRS's employment taxes pages are the reason: a reimbursement arrangement that is not set up properly can turn into pay, which changes both sides of the transaction.
Each of those is a question with a professional answer and no safe amateur one.
Stop and get help when
- Vehicle changed hands, use, or lease mid-year
- Depreciation claimed and method may change
- Log is thin for part of the year
- Entity owns the car, individual drives it
Where the review points next
The mileage rates overview covers the two methods and what a log has to contain. The wider substantiation question, including how long any of this has to be kept, sits in tax records and audits. If a company owns the vehicle, start with entity tax treatment, because who claims what depends on what the business is for tax purposes.
Common questions
How long should a review take?
An hour for one vehicle with a decent log. If it takes a day, you are not reviewing, you are reconstructing, and that is the actual finding.
The review found problems in a return already filed. Now what?
Ask a professional whether an amended return is called for. Some errors get corrected, some are left, and the decision depends on what changed and by how much. It is not a decision to make alone.
Can I review my claim without knowing the rate?
Yes, and that is the point of the order used here. Everything above is about which miles, which method and which records. The figure only matters once those are settled.
My log is an app export. Is that enough?
It can be, if the entries carry a date, a destination, a purpose and the miles, and if the classifications were reviewed rather than left on a default. An app that guessed and was never corrected is a guess with a timestamp.
