Keep a contemporaneous use record
Use a reliable log showing the date, destination, business purpose, and business miles of trips. Record total mileage and distinguish personal use and commuting. Preserve evidence that supports the log, such as appointment records or work orders. A map estimate prepared months later may omit important facts. IRS Publication 463 explains vehicle expense methods and recordkeeping, including the need to distinguish business travel from personal transportation.
Preserve the full ownership and cost history
Keep the purchase agreement, financing, registration, insurance, maintenance, fuel, lease documents if applicable, and dates placed in service or disposed of. Identify any reimbursements. Ask the preparer how eligibility and prior choices affect available methods. Do not assume a larger or more expensive vehicle is a better business decision because a salesperson describes a possible tax deduction.
Evaluate the business case before replacing a vehicle
Compare purchase or lease cash costs, financing, operating costs, useful service, expected business use, and resale assumptions. Consider lower-cost alternatives where practical. For example, a vehicle used for both family errands and client visits needs records supporting the business portion, even if it is titled in a company name. Review changes in use during the year and tell the preparer about a sale or trade-in.
- Log business trips promptly with purpose and mileage.
- Track total mileage and separate personal transportation.
- Save acquisition, operating, reimbursement, and disposal records.
- Compare methods and future consequences before making elections.
Questions to consider
Does company ownership make every mile business use?
No. Actual use and the applicable rules determine treatment. Personal and commuting use must be identified even when the company owns or pays for the vehicle.
Should I choose mileage or actual costs myself?
Collect the records for an informed comparison and discuss eligibility, prior choices, and consequences with your preparer before deciding. Current rates and rules should be confirmed for the relevant tax year.
Official sources and further reading
Use this guide to prepare questions and organize records. It does not determine eligibility, establish a professional engagement or guarantee a tax or business outcome.