Taxpayers must keep complete and accurate mileage records, or the Internal Revenue Service could disallow the deduction. There are two methods for claiming business car expenses actual expenses or the standard mileage rate. With actual expenses, taxpayers can add all their car operating expenses for the year gas, oil, tires, repairs, license fees, garage rental, insurance and depreciation, subject to certain limitations and then deduct the percentage of the total that was for business, based on mileage records. Instead of tracking actual car costs, taxpayers can use the standard mileage rate. Multiply the business mileage by the standard rate of 32.5 cents per mile.
Travel expenses are ordinary and necessary expenses while away from home on business.
Taxpayers should keep whatever documents they can gather to prove where they went, why they went there, how long they stayed and how much they spent. If the travel includes some business and some personal aspects, they should keep clear records showing exactly how much is related to business. Taxpayers should keep lodging receipts, including receipts for cleaning and laundry, telephone charges and tips. They should also keep transportation receipts, such as airline, train or bus ticket stubs, travel agency receipts, rental car or taxi receipts. These should show the dates and services involved.