Vulocity - 4/15/2008

Accurate Mileage Logging for Tax Deductions – Automated and Simplified

Renowned CPA, author and lecturer Eric Gelb—AKA The Revenue Miner—shows you how to easily and painlessly 
log miles for tax deductions with due diligence

By Eric Gelb, CPA, MBA

When it comes to itemized tax deductions, indisputable documentation is vital. Any sign that suggests a lack of 
credible evidence can lead to the “red-flagging” of your tax return, a possible audit and, if the audit reveals doubts 
about your supporting documentation, a decision against you, resulting in your owing considerable taxes, interest 
and penalties which you might not have otherwise owed. Statistics show that deductions for travel, auto and 
entertainment are the top of the IRS' target list because it is all too common for people to either fail to keep the 
required documentation or to take deductions that have questionable business purposes.

Oftentimes the most recurrent of these types of deductions is mileage driven for business—and oftentimes it is the 
most cumbersome to track. This is because data collection usually depends on something inherently faulty: 
human memory. Memory seems to work fine when you’re sitting on the shore of a lake reflecting back on the 
good times in your life, but when you’re stuffing breakfast in your mouth while rushing out the door to make an 
appointment while your cell phone is ringing, remembering to check the odometer or log the mileage for your trip 
can often fall through the cracks. 

Over time, I’ve seen many inventive ways to reconstruct mileage after forgetting to log it. One method is to enter 
your starting and finishing addresses into Google Maps, Mapquest or the like and calculate the mileage from their 
data. Others will just try to “guestimate” based on former or similar trips. Where this falls apart, of course, is if you 
wait too long and forget about the trip, or if you combined the trip with several others; for example, you made 6 
different stops and some included business and some didn’t.  

“I’ve always used the old pen and paper method to track my mileage,” says Brandon Lansford, long time real 
estate appraiser who generally drives 25,000 – 30,000 miles a year. “On every job, I’d have to go back and look 
at the odometer mileage of what I drove. The trouble is when you get in a hurry, you forget to set the odometer 
mileage tracker back to zero. And human nature being forgetful, I wouldn’t record the mileage for every single trip. 
I’d estimate it if I could, or just have to let it go.” This leads to lost tax deductions and a tax bill that’s higher than 
necessary. 

A real estate agent in Austin, Texas, who drives 20,000 – 25,000 miles a year, had similar problems keeping track 
of mileage. “Basically I slagged it,” he says. “I did what I could to log individual trips, but I had just a hodgepodge 
of methodologies that hopefully would hold up to an audit.”

The end result of “forgetting and estimating” mileage usually hits hard right about tax time when you’re trying to 
gather all the documentation for your deductions. Harold Miller helps his wife, Karin J. Miller, a Practice 
Management Consultant for dental practices, put together her tax documentation every year, and mileage has 
always been problematic. “Logging mileage would always start out real good at the beginning of the year, but my 
wife would become forgetful and start sporadically omitting it. By the time we got down to the end of the year, 
record-keeping wasn’t so good and I was having to re-create everything. It generally took me about a month to 
put it all together.” 

While there still may be many other problems related to documenting deductions, new technology is now making 
it easy for anyone who must track their mileage. One device, the Mileage LoggerTM, manufactured and distributed 
by Vulocity, is truly “idiot proof.”  It simply plugs into your car and automatically tracks the mileage every time you 
drive. It then transmits your mileage data to a website. What makes it most user-friendly is that there is no need to 
install software or download anything. You log into the site with your own account, add notes as needed, and 
retrieve your trip log.  The Mileage Logger system uses interactive mapping to help you allocate whether the 
mileage you drive is for business, commuting, personal use, medical or charity. You can edit and print out reports 
from the website which you can use to accurately substantiate your deductions. 

“It goes on automatically when I start driving,” says the Austin real estate agent who used to have to estimate 
mileage. “At the end of the month, I go online and simply delete those trips that weren’t business-related. The 
reports are probably the biggest advantage of the product.”

The Mileage Logger has also solved the mileage-tracking problem for Harold Miller and his wife Karin. “I got tired 
of having to re-create everything for the IRS,” he says. “I started searching and found the Mileage Logger. All my 
wife has to do is drive, and once a week she goes online and updates the trips between the business, commuting 
and personal miles.” And now, instead of the month it used to take Miller to put together his wife’s mileage 
documentation, it’s as easy as printing out a report at the end of the year.  

“Mileage tracking is automatically done,” says Brandon Lansford, who previously had so much trouble manually 
recording his mileage. “Another feature I like is that you can go to any address you have been and click on it, 
nd a mapping or satellite image shows that location.  In my particular case as a commercial appraiser, that’s 
really good to be able to see a satellite image of the developments around a particular property. There are other 
ways of getting satellite imaging, but I like this one the best because it actually takes me right to the location 
where I have been while I am editing the Mileage Logger records. That’s a real time-saving feature. Now my 
tax records are complete.”

For salespeople, real estate agents, real estate appraisers, financial planners, home health aids and others who 
consistently drive their vehicles for business reasons, the Vulocity Mileage Logger could be a useful tool to 
improve tax and businesses records, as well as ease some of the pain associated with soaring gas prices.

Eric Gelb has been an executive with companies including PriceWaterhouse Coopers, Citigroup and JP Morgan 
ChaseBank and he has advised many individuals seeking personal financial planning, attending his many lectures 
and reading his blog. You can find more financial advice at Mr. Gelb’s web site: http://www.revenueminer.com.

www.mileagelogger.com