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Taking Auto Expenses? Be Prepared.

Date: January 20, 2020

Author: Trish Wright


If you drive your car for business (not commuting) than by all means, take the deductions you are allowed! Know though that mileage is frequently targeted for paper audits. A paper audit is a letter the IRS sends to you asking for documentation of your expenses.  Typically, you just fax in your back up.  To prove auto mileage expenses, be prepared to literally go the extra mile.  Most everyone knows that you should keep a log of where you went and why with date and odometer readings.  What you might not know is that you also need proof that your odometer actually "turned".  You can provide this proof by showing copies of repair bills with the odometer readings on them and the mileage between the repair bills can be used to infer your total yearly mileage.  You could also make it a habit to take a photo of your odometer alongside a newspaper as proof of date at the beginning of every year.  ADDITIONALLY, the IRS  requests a copy of the section of your employee handbook (for reals) that states your company's mileage reimbursement policy as the IRS wants to make sure you are not double dipping. Since these paper audits usually happen 18 - 24 months after the return is processed, tax payers may have already left that job and no longer have access to that documentation.  So it is probably a good habit to copy the hand book and keep it with that years tax paper work.

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