| Accurately tracking vehicle mileage is often | | | | Customer report. From the Reports menu, select |
| overlooked in small business accounting and tax | | | | Customers & Receivables, then select |
| preparation. Often, either mileage is underreported | | | | Transaction List by Customer. Using the Modify |
| due to lack of records or a fear of being audited, | | | | button, select the Filters tab. In the box labeled |
| or it's over-reported, also due to lack of records, | | | | Filter, select Transaction Type. Change the |
| or a "I know how much I drove" attitude. | | | | Transaction Type from All to Invoice. Click Ok, |
| Although it's best if taxpayers have a small | | | | then print the report. |
| notebook in the car to record actual odometer | | | | 4. Compare the reports. Look at every line item |
| readings each time a business trip is made, this is | | | | to see if it represents a place you actually drove, |
| cumbersome, and most people don't want to do | | | | either to purchase something, have services |
| it. Accurate records are a must, because mileage | | | | rendered, or perform work for a customer. If |
| deductions must be able to stand up to scrutiny in | | | | there are destinations missing in the Mileage by |
| the event of an IRS audit. | | | | Vehicle report, enter them (from the Company |
| QuickBooks can help. Use the following steps to | | | | menu, select Enter Vehicle Mileage). Don't forget |
| generate and record vehicle mileage. | | | | to include the trip destination in the Notes field. |
| 1. If you do not have any mileage records already | | | | Consider using one of the online map sites (such |
| recorded in QuickBooks, proceed to step 2. If you | | | | as Yahoo! Maps or Mapquest) to generate printed |
| do have a few mileage records recorded in | | | | information about the distance between your |
| QuickBooks, go through them and make certain | | | | office and the destination. Save the reports and |
| each one has the trip destination recorded in the | | | | the printed map information for your tax file. |
| Notes field, such as "ABC Printing" (from the | | | | Caveat |
| Company menu, select Record Vehicle Mileage, | | | | I am not asserting that this method will definitely |
| then page through the records to check them). | | | | stand up to IRS scrutiny. However, this is |
| Then, generate a Mileage by Vehicle Detail report | | | | certainly better than going into an audit with no |
| (from the Reports menu, select Jobs, Time, | | | | mileage records. Here's a quote from IRS's |
| & Mileage, then select Mileage by Vehicle | | | | Publication 17 for 2004, from page 193 where it |
| Detail). In the Dates field, select This Tax Year to | | | | discusses Adequate Records: "Documentary |
| Date. Using the Modify button, eliminate all columns | | | | evidence ordinarily will be considered adequate if it |
| except Vehicle, Trip End Date, Total Miles, and | | | | shows the amount, date, place, and essential |
| Notes. Print this. | | | | character of the expense." As long as you can |
| 2. Generate a Profit and Loss Detail (from the | | | | produce the receipt or invoice showing the trip, |
| Reports menu, select Company and Financial, then | | | | and the map information showing the distance, |
| Profit & Loss Detail). Set the date range for | | | | this method fulfills these requirements. |
| This Fiscal Year to Date. Using the Modify button, | | | | Nobody wants any of their deductions disallowed |
| eliminate all columns except Type, Date, Name, | | | | for lack of evidence. If you don't want to use a |
| Memo, and Amount. Print this. | | | | mileage notebook in the car, this method will help |
| 3. If your company is the type where you drive | | | | ensure that whatever mileage you do claim is well |
| to see customers, generate a Transaction List by | | | | documented. |