--- title: "Business Mileage & Vehicle Expense Tracking | MCC Solutions" description: "Log trips, work out business-use percentage and compare methods. Worked example, plus how to check the IRS rate for the year." url: "https://mcc-solutionsnj.com/bookkeeping/guides/tracking-mileage-and-vehicle-expenses" --- Bookkeeping guide · Updated October 12, 2026 # Tracking Mileage and Vehicle Expenses for Business Vehicle expenses are a common deduction and a common audit question. The difference between a deduction you can support and one you cannot is usually the log. A simple routine takes little effort. By [Matthew Coleman](/about), MCC Solutions **Quick answer.** For each business trip record the date, starting point, destination, business purpose and miles driven, plus the odometer reading at the start and end of the year. Entries made at the time of the trip are more credible than ones rebuilt later. Want this handled for you? Monthly bookkeeping, cleanup and year-end close for small businesses. Start with a free health check of your books. [Free health check](/bookkeeping/health-check)[Get a quote](/bookkeeping/#interest) **Related:** [Trial balance explained](/bookkeeping/guides/trial-balance-explained) · [Owner contribution or loan](/bookkeeping/guides/owner-equity-and-capital-contributions) · [Closing entries and retained earnings](/bookkeeping/guides/closing-entries-and-retained-earnings) **Free tools:** [Mileage deduction calculator](/bookkeeping/mileage-deduction-calculator) · [How many sales do I need to break even?](/bookkeeping/break-even-calculator) [![Intuit ProAdvisor Gold tier badge](/img/credentials/intuit-proadvisor-gold.png)](https://proadvisor.intuit.com/app/accountant/search?searchId=matthew-coleman77)Gold tier in Intuit's ProAdvisor program. [See my Intuit listing](https://proadvisor.intuit.com/app/accountant/search?searchId=matthew-coleman77) Keeping your own books? Tallyfinch does invoices, bank import and reports on your computer. [See Tallyfinch](/bookkeeping/mcc-books-downloadable-bookkeeping-software) ## What a good log contains For each business trip record the date, starting point, destination, business purpose and miles driven. Also note the odometer reading at the start and end of the year. Entries made at the time of the trip are more credible than ones rebuilt later from memory. Commuting from home to a regular workplace is generally not business mileage, but trips between work locations may be. Ask your tax preparer how your situation is treated. ## Ways to log A paper notebook in the glove box works. So does a spreadsheet or a phone app that tracks trips automatically. Whichever you choose, review it weekly so gaps are caught. A log with obvious holes or round numbers looks unreliable. If more than one vehicle is used, keep a log for each. ## Standard mileage or actual expenses There are two common methods. The standard mileage method applies an IRS-published rate per business mile and covers most operating costs. The actual expense method deducts the business share of gas, repairs, insurance, registration and depreciation. The rate changes, so look up the current one on the IRS website. Rules about switching methods and about first-year choices exist, so decide with your tax preparer before the first year of use. ## Recording it in the books With the standard method, post a periodic entry for the mileage deduction, using the log's total miles times the rate. The offset may be an owner reimbursement or equity entry if the vehicle is personally owned. With actual expenses, code fuel, repairs and insurance paid from business accounts to vehicle categories and carve out personal use. If the vehicle is owned by the business, record it as a fixed asset and depreciate it. Employee mileage reimbursed under a written policy should be tracked on a separate line. ## Records to keep Keep the log, purchase records, loan statements and receipts for the repairs and fuel if you use actual costs. Save year-end and start-of-year odometer photos. Keep them for the period recommended by the IRS and your tax preparer. If a vehicle is used partly for personal reasons, the personal share is not deductible. Be honest and consistent, and note the percentage calculation in your records. ## Common vehicle record mistakes Frequent problems include logging only the destination without a purpose, claiming every mile of a vehicle that is also the family car, and forgetting to log short trips that add up over a year. Another is mixing methods across years without checking the rules. A monthly review of the log against your calendar catches most of these. Photos of the odometer at year start and end provide a simple cross-check. ## Worked example with numbers Over a year you log 6,200 business miles out of 11,000 total, so business use is about 56% (6,200 / 11,000 = 56.4%). If you use the actual-expense method and vehicle costs were $5,400, the business portion is $5,400 x 56.4% = about $3,044. If you use the standard mileage method, you multiply business miles by the IRS rate for that year, and you do not also deduct actual costs. Check the current IRS rate and the rules for choosing a method; they differ by vehicle and year. Your preparer can tell you which method suits you. ## Check your work Test the log by picking five random trips and checking them against your calendar, invoices or receipts. If you cannot support them, tighten how you log. ## Common questions **Can I reconstruct a log after the fact?** It is much weaker than a contemporaneous one. Use calendars and receipts to help, and start logging now. **Does the mileage rate change?** Yes, usually each year. Check the current figure with the IRS. **What about leased vehicles?** Lease costs and deduction limits have special rules. Ask your tax preparer. This guide is general information, not tax, legal or accounting advice. Rules, fees and due dates change; check with the IRS, the NJ Division of Taxation or a licensed professional for your situation. Let us handle it [### Monthly bookkeeping Categorizing, reconciling and monthly reports, with cleanup, payroll and NJ filings available. Bookkeeping →](/bookkeeping/) [### QuickBooks Online Monthly bookkeeping, cleanup and reconciliation in QuickBooks Online for New Jersey small businesses. Your account stays in your name. QuickBooks →](/bookkeeping/software/quickbooks-online)[### FreshBooks Bookkeeping, invoice clean-up and reconciliation in FreshBooks for New Jersey freelancers and service businesses. FreshBooks →](/bookkeeping/software/freshbooks) More guides - [Keeping Records for a Home Office Deduction](/bookkeeping/guides/home-office-expense-records) - [Uncategorized and Suspense Accounts: Clear Them Out](/bookkeeping/guides/uncategorized-and-suspense-accounts) - [Bank Feeds and Rules: Automate Without Losing Control](/bookkeeping/guides/bank-feeds-and-rules-automation) - [Bad Debt and Write-Offs: Recording Uncollectible Invoices](/bookkeeping/guides/bad-debt-and-write-offs) Free tool - [Bookkeeping health check](/bookkeeping/health-check) [All guides](/bookkeeping/guides) Reach small business owners, freelancers and bookkeepers who read this guide: [advertise here](/advertise#bookkeeping). Do it yourself ### Sole Proprietor Tax-Time Organizer Gather everything your tax preparer will ask for in one place, spot 1099s that do not match your records, and hand over a clean one-page summary. [See what's inside ($24)](/toolkits/sole-proprietor-tax-time-organizer) [Free sample](/toolkits/sole-proprietor-tax-time-organizer#free-starter)14-day full refund Excel workbook ### Gig Driver Income and Mileage Tracker Log each day by platform and see what you really earn per mile and per hour, which platform pays best, and how much to set aside for taxes. [See what is inside ($19)](/toolkits/gig-driver-income-mileage-tracker) Also in the [Driver and Side Hustle Bundle](/toolkits/driver-side-hustle-bundle): 3 products for $49 instead of $62 separately. Tallyfinch ### Books you keep on your own computer Tallyfinch does invoices, bills, bank import, reconciliation and the main reports, in a file you own. $99 once, then $5 a month for updates; the app keeps working if you stop the plan. It does not do payroll or sales tax filing. The free download records up to 60 entries. [See Tallyfinch](/bookkeeping/mcc-books-downloadable-bookkeeping-software) [Download it free](/tools/pro/trial/mccBooks) [Compare the three apps](/software) ## Rather have us keep the books? Ask for a quote. [Get a Quote](/bookkeeping/#interest)[Call (908) 444-6373](tel:+19084446373)