Substantiation for Entertainment and Vehicle Deductions

For entertainment and travel deductions, there is no alternative for records maintained on a contemporaneous basis (preferably weekly). No records – no deduction.

Again, no records, no deduction.

Be sure to maintain a log that ties directly to appointments or other business travel purposes.

To ensure that travel is properly documented, take advantage of the following travel logs:

PDF log:

Tax Diary

Excel spreadsheet log:

Tax Diary Summaries

If maintaining a manual mileage log is too difficult, consider the following apps:

IRS Publication 463 is plain:

You cannot deduct amounts (for entertainment or vehicle) that you approximate or estimate.

You should keep adequate records to prove your expenses or have sufficient evidence that will support your own statement. You must generally prepare a written record for it to be considered adequate. This is because written evidence is more reliable than oral evidence alone. However, if you prepare a record on a computer, it is considered an adequate record.

Definition of adequate record: proof in an account book, diary, log, statement of expense, trip sheet, or similar record. Documentary evidence that supports each element of an expense should also be kept.

Remember that the burden of proof falls to the taxpayer. It is a part of doing business. Take time weekly to adequately document travel and entertainment expenses. In addition, keep receipts.

A mileage log is required. Failing to keep a good log exposes the taxpayer to an audit which may cost the taxpayer the vehicle deduction and maybe much more.