Section 274(d) substantiation

Section 274(d) requires "adequate records" or "sufficient evidence corroborating the taxpayer's own statement" to substantiate vehicle expenses. The IRS interprets adequate records as a contemporaneous log showing date, total miles, business miles, destination, and business purpose for each trip — or at minimum, weekly summaries.

Reconstructed logs are weak

A log reconstructed from memory at year-end (or worse, at audit) is routinely disallowed. Smartphone apps eliminate this risk by capturing trips automatically. The cost of a $5/month mileage app is small relative to the deduction at stake — for a high-mileage gig worker, the standard mileage deduction can exceed $10,000 a year.

Three required data points

(1) Date of the trip. (2) Number of miles driven. (3) Business purpose — who you saw, what you did, why it was business. Many filers capture (1) and (2) but skip (3) — and that omission alone is enough for an auditor to disallow the deduction.

Sample log format

Date | Start odometer | End odometer | Miles | Destination | Business purpose. Keep one row per business trip. At year-end, your odometer readings reconcile to the year-start and year-end totals you also need to record. Total business miles divided by total miles equals your business-use percentage for the actual-expense method.

Personal trips count too

You also need total miles driven for the year (business + personal) to compute business-use percentage. Apps capture all trips automatically and let you classify each. Manual loggers should record year-start and year-end odometer readings even if individual personal trips are not logged in detail.

Worked example with numbers

Consider a sole prop with $100,000 in gross receipts and $30,000 in legitimate Schedule C deductions, including this category. Each additional $1,000 of qualifying expense reduces Schedule C net profit by $1,000, which reduces self-employment tax by approximately $1,000 × 92.35% × 15.3% ≈ $141, and reduces income tax by $1,000 × marginal rate. At a 22% federal marginal rate, the combined federal tax savings on each additional $1,000 of legitimate deduction is roughly $361, and state savings sit on top of that. The math is why disciplined categorization throughout the year pays for itself.