Most people are so confused about the IRS rules for driving tax deductions that they simply skip taking any deductions. Persons eligible do not take the time and effort to report the miles. Tax filers are also unclear of how to report, and how to keep records that will stand up to a potential IRS audit.   This article provides driving deduction tax information and provides tools that help you to easily track your miles.

Mark Bryant, a Certified Public Accountant in Fort Worth, Texas says, “During my 25 years doing income tax records for citizens, I have explained hundreds of times how a taxpayer may document their miles so that I can deduct them on their taxes.  I would have to predict that less than 25 percent of eligible taxpayers report their full amounts, and these spend considerable time and effort doing so.”

In order to take any of the below deductions, you must keep a “mileage log.”  This can be a simple notebook, an excel spreadsheet, or kept on your cell phone.  The information you need to record is the same in most of the various tax deduction scenarios.   You can visit the IRS page on Adequate Records to find out more information about the type of documentation necessary to prove expenses.

Tax Deductions:

First, you must understand the tax rules, and choose which tax deductions/credits that you may use.  You must decide whether you can file as self-employed, claim the deductions through a business you own, or if you file a normal W-2 and have qualifying deductions.  

According to the IRS, driving falls into three categories,

1. Personal Use/Commute to work, which is not deductible.
2. Business Use driving, necessary and normal in the course of business.
3. Commuting between multiple offices which may be deductible.  In order for you to deduct miles between your home and office, you must have a qualifying deduction for a “home office” or “home business.”

Personal Commute to work:

Assume you have a job, and you live somewhere.  If you get in your car and drive from your home to your job; you may not deduct the mileage.  Typically, all driving falls into two categories Personal Use and Business Use. 

You may not deduct any driving for Personal Use, but you MAY be able to deduct expenses related to Business Use of your vehicle.  Commuting is generally considered personal use.

Business Use:

Business Use is defined as driving directly connected with your business, customary or accepted, and necessary in the transaction of business, and not reimbursed to you by the business.  It does not need to be essential.  Common tasks would be depositing checks, visiting the post office, visiting clients, etc. for business purposes.

Usually Business Use originates from an office which is not your home, excluding the drive from your home to the office.  You MAY deduct any miles that are in addition to your normal commute if you make a side trip related to your job on your way to the office. 

If you are self-employed, or own a business, then you can deduct usage of your personal vehicle for business u