Driving for Dollars deductible?

[Paul Bowers]

I'm starting to track my mileage via the Mileage IQ app and wondering whether driving for dollars mileage is deductible.  If so, does that make virtually all my mileage deductible?  I can't remember the last time I drove anywhere that I wasn't scouting for properties, writing down addresses, etc...  Where do you draw the line between just driving and driving for dollars as far as deductibility?

[Paul Allen]

Originally posted by @David Lecko:

Entrepreneur Magazine has a blog out there about the top ten questions you should ask when selecting an accountant. One question from the article is something like "Would you consider yourself a more aggressive or conservative account," suggesting to me there might be some personal choice on something like this.

Rules for deducting vehicle expenses. 

The personal choice is in how often you want to lose at audit. Some tax professionals don't mind losing at audit. Others would rather eat directly out of a dumpster than lose at audit. 

Investors should also be aware there is an unequal distribution of risk-reward when taking an aggressive position on a tax return. If the taxpayer claims mileage expenses that are subsequently disallowed the taxpayer has to pay the tax, some interest, and possibly a penalty. If the tax professional (me) helps a taxpayer claim mileage that is subsequently disallowed then the IRS has found a tax preparer that plays loose and fast with the rules.  They aren't stupid. Suddenly a significant percentage of my clients are getting audited. That's not going to be great for my business - a higher risk than paying some tax and interest.

So, keep in mind, while it sounds cool to have an aggressive tax professional, s/he isn't being aggressive on only your return. S/he is likely being aggressive on everyone's return - making it more likely you will be proving your expenses to the IRS at some point.  Keep good records!