First, you need them – or you can simply kiss your vehicle deductions goodbye.

You can keep them on a sample basis, like the three months in IRS Regulation 1.274-5T(c)(3)(ii)(c), Example 1.  If you keep the records using this three-month sample, you need this information when you are done:

• Beginning and ending odometer readings for the year so you can prove total business miles for the year.
• Beginning and ending odometer readings for the three-month test so you can prove total business miles for the sample period.
• Notes of business use for each day during the sample period.

Keep the notes of business use easy.  Make the vehicle-use notes in your appointment book next to your appointments and activities.

If your office in your home qualifies as a principal office, your trips from your home office to your downtown office are business trips. You should note these trips in your appointment book.

If you are in the commercial or residential real estate business and take a client to see five properties, you might make a note in your appointment book like, “Jim Smith, showed five properties.” In this instance:

• You would have put Jim Smith’s name in your appointment book when you made the appointed date and time.
• You would add the “showed five properties” once you completed the appointment.

You do not have to detail each of the five stops in your appointment book.  You probably would have corroborative evidence of the five stops in an e-mail to Mr. Smith, in a paper file you kept on Mr. Smith, or perhaps in some other type of file.

If you are not good at keeping paper records, here’s a tip to accumulating the paper you might need later in case of an IRS audit. Simply print your e-mails and copy your documents and put them in a box.  Use a new box for each year.  Should you now face an audit, you have a pile of useful documentation.