Can I deduct auto expenses and mileage?

This question comes to me so frequently that it’s actually part of our initial questions we ask new clients. Tax deductions are more of an accounting question than a bookkeeping question, but we know the basics of how this works. The IRS allows you to deduct actual expenses or mileage, not both. You would generally want to take whichever deduction gives you the most savings.

Unfortunately, the only way to know which is better is to track both, which is extra work. At the end of the year, your accountant will review the actual expenses compared to the mileage and let you know which is better for you. We tell our clients to expense all auto and travel on the business account, which we keep track of in QuickBooks making it simple. For the mileage, you can use an app or a paper log but if you want certainty in an audit, be sure to track the starting mileage, ending mileage, where you started from, where you stopped, and what the purpose of the trip was for. Without all of this, the mileage can be disallowed in an audit leaving you stuck.