Substantiation
Quick definition
The IRS requirement to support a deduction with adequate records, including the date, destination, business purpose, and miles for each trip.
Substantiation is the IRS standard for proving a deduction is real. For mileage, that means records showing the date, destination, business purpose, and miles driven for each business trip.
The four elements
- Date of the trip
- Destination or route
- Business purpose (see business purpose)
- Miles driven
Adequate records vs reconstruction
A contemporaneous log kept at or near the time of travel is the gold standard. Reconstructed logs built after the fact carry less weight and are a frequent point of failure in an IRS audit. Because vehicles are listed property, the substantiation bar is higher than for ordinary expenses.
Related terms
Contemporaneous Log
A mileage log created at or near the time of the trip. What the IRS expects to see in an audit.
Odometer Reading
Start-of-year and end-of-year vehicle odometer numbers. Required to verify total mileage on the tax return.
IRS Audit
A review of a tax return. Mileage deductions are one of the most-questioned line items.
Track every business mile.
40 auto trips a month, free forever. Switch from any tracker with a one-tap CSV import.
Download free on the App Store