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Tracking your car expenses

November 21, 2008

There are two good new posts up on tracking car expenses. As Bruce the TaxGuy points out:

Mileage should be tracked on a daily basis – the same way you record in your calendar where you went, who you went to see and why. In fact you could easily do this all in one step. When you write down where, who, and why, also write down the mileage. On your tax return when you claim a deduction for auto expense there are two questions that being able to check “yes” to, is of major importance for a well prepared return:

1. Do you have evidence to support business use?

2. Is the evidence written?

The Wandering Tax Pro has some sound advice on the issue:

I have found that, for me, the best way to keep a mileage log is in my daily appointment book.

If you like Palm OS as your planner, there are a number of applications to do this. I like using the appointment calendar as the place to track mileage because it's easier to keep it all in one place, and it makes it easier to document the business purpose of the trip.

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