The IRS requires five pieces of information for every business trip: the date, where you went, the business purpose, the number of miles driven, and your odometer reading at the start and end. Missing any of these and your log may not hold up if you’re ever audited.

The most important rule is to record trips as they happen. The IRS calls this a “contemporaneous” record, meaning you logged it at or near the time of the trip. Sitting down in December to reconstruct a full year of driving from memory doesn’t qualify. Auditors can tell when a log was created after the fact, and they will challenge it.

For contractors and trades, most of your driving qualifies as business mileage. Trips between job sites, runs to the supply house, drives to meet a client for an estimate, trips to the dump or the equipment rental yard. All business.

What doesn’t count is your commute. Driving from home to your first job site and from your last stop back home is considered commuting, even if the location changes daily. There is an important exception though. If you have a qualifying home office that serves as your principal place of business, drives from home to job sites become deductible business trips instead of commutes. For skilled trades and service businesses, this distinction alone can add thousands of deductible miles per year.

The easiest way to keep a compliant log is a mileage tracking app. MileIQ, Everlance, and Hurdlr run in the background on your phone and automatically detect trips using GPS. At the end of each day you swipe to classify each trip as business or personal. The app generates IRS-compliant reports you can hand directly to your accountant. If you prefer paper, keep a small notebook in your truck. Write the date, destination, purpose, and miles after each trip. It takes 30 seconds. The key is doing it every single day.

You’ll also need to decide between the standard mileage rate and actual expenses when you file your return. The standard rate for 2024 is 67 cents per mile. Actual expenses means tracking gas, insurance, repairs, and depreciation, then deducting the business-use percentage. Your CPA can help determine which method saves you more, but either way the mileage log is the foundation you need.

A clean mileage log feels like a hassle day to day, but it turns into real money at tax time. A contractor driving 20,000 business miles a year is looking at over $13,000 in deductions from mileage alone. Skip the log and you either leave that money on the table or you’re gambling in an audit. This is one of the most common deductions that gets missed or underclaimed when trade businesses don’t have proper records. Good contractor bookkeeping services will help you build the habit and make sure those miles actually show up where they should on your return.