Although the tax benefit for mileage used for work is no longer deductible as an unreimbursed employee expense, business mileage deduction is still an option for business owners.
Business mileage deduction has always been a hot area to audit for the IRS.
They know taxpayers do not keep or maintain appropriate contemporaneous logs necessary to substantiate their tax deductions.
**You should keep a record of your travel whether you take standard mileage or actual expenses on your return**
I see it time and time again. Taxpayers are so busy managing and growing their business they do not have time to kept a required log.
IRS Publication 463 defines Adequate evidence as “documentary evidence ordinarily… adequate if it shows the amount, date, place, and essential character of the expense.” (see page 25)
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Throughout the year, I come across concerns that frequently affect individual taxpayers and their planning strategies. Often times, they ‘hear’ information from a friend or co-worker that is useful. Sometimes that information is inaccurate.
One area that has come up more than once is deductions related to work expenses not reimbursed, although eligible for reimbursement.
There are a number of factors to consider when determining if work expenses are deductible for tax purposes. However, here is a great article that demonstrates what can happen if a taxpayer does not consult a tax professional when taking a position on their income tax return.