What Records Should a Reservist Keep for the Travel Deduction?
Keep a written record of every trip and a receipt or bill for what you paid, then hold on to both until the time limit for that tax return has run out.
Why the IRS cares about records
IRS Publication 463 says that if you deduct travel expenses, you must be able to prove certain elements of each expense. That is what "substantiate" means.
The key sentence is short: you cannot deduct amounts that you approximate or estimate. The figure has to come from something you wrote down or something you can show.
What counts as an adequate record
Pub 463 asks for adequate records, or sufficient evidence that will support your own statement, and says a record generally has to be written to count as adequate.
The publication names an account book, diary, log, statement of expense, trip sheets or a similar record as places to keep that proof.
Pub 463 says a record prepared on a computer is considered adequate. It does not name spreadsheets or phone apps, but a typed log fits that wording.
The same publication notes that timely and accurate records are your support if your return is examined. A note made after each drive is worth more than a list rebuilt from memory the next April.
The records to keep, item by item
| Item | What to keep | Why |
|---|---|---|
| Mileage | A dated log of each trip: start, destination, purpose, miles. See the mileage log guide. | Estimates are not deductible; a log is one of the record types the IRS names. |
| Lodging | The hotel receipt or bill. | Documentary evidence such as receipts, canceled checks or bills is generally required. A hotel receipt is enough if it shows the hotel's name and location, the dates you stayed, and separate amounts for lodging, meals and phone calls. |
| Meals | The date, place and purpose of the trip, and your receipts if you have them. | Even with the standard meal allowance you must still keep records that prove the time, place and business purpose of the travel. |
| Parking, tolls, ferries, airfare, rental car | Receipts, canceled checks or bills. | Pub 463 asks for this kind of documentary evidence for expenses generally; it does not list each travel cost by name. See the travel costs guide. |
| Reimbursements | Any pay stub, voucher or payment record showing money your unit or employer paid you for travel (our suggestion). | Reimbursed amounts come off your expenses, and Form 2106 has a line for them. Pub 3 says you can deduct your unreimbursed travel expenses, and unreimbursed travel expenses are deductible, and Form 2106 has a line for reimbursements received. |
| Orders and drill schedule | Your orders or schedule showing the dates and place. | Our advice, not an IRS requirement: a document someone else produced backs up the dates in your log. |
| The return itself | A copy of the filed return and Form 2106 (our suggestion). | The IRS asks you to keep records that support an item on a return until the period of limitations for that return runs out; a copy of the return shows what you claimed. |
When a receipt is not required
Pub 463 says documentary evidence is not needed if any of three conditions applies:
- you account to your employer under an accountable plan for meals or lodging while traveling away from home, and you use a per diem allowance method that includes meals and/or lodging;
- the expense, other than lodging, is less than $75; or
- you have a transportation expense for which a receipt is not readily available.
These exceptions concern the receipt. The sentence we found does not say you may skip the written record, so keep writing down the date, amount and purpose. The $75 line is not permission to estimate: amounts you approximate or estimate are still not deductible.
Reimbursements are part of your records too
On Form 2106 you subtract reimbursements from your expenses; if the reimbursement is larger, the instructions say to report the excess as income. Keep a record of what you were paid as well as what you spent.
Pub 463 also separates accountable from nonaccountable plans: excess money not returned within a reasonable time under an accountable plan is treated as paid under a nonaccountable plan. Keep whatever shows which kind paid you.
How long to keep everything
Pub 583 says to keep records as long as they may be needed for the administration of any provision of the Internal Revenue Code. IRS Tax Topic 305 turns that into a working rule: keep the records that support an item on a return until the period of limitations for that return expires.
For example, Topic 305 lists these periods:
- 3 years to assess tax you owe, generally counted from the date you filed. A return filed before the due date is generally treated as filed on the due date.
- 6 years if you did not report income you should have, and it is more than 25% of the gross income on the return or is attributable to foreign financial assets and is more than $5,000.
- No limit if a return is fraudulent or no valid return was filed.
- Refund claims: 3 years from filing or 2 years from payment, whichever is later; if no return was filed, 2 years from payment.
- 7 years for a refund claim from a bad debt deduction or worthless-securities loss, from the return due date.
- Property records: until the period of limitations expires for the year you dispose of the property.
- Employment tax records (if you have employees): at least 4 years after the tax is due or paid, whichever is later.
If you may amend, the IRS says to file generally within 3 years of the original return or 2 years of paying the tax, whichever is later, so keep those records. See amending past returns.
What happens if the IRS examines your return
Pub 556 says the IRS accepts most returns as filed but examines some to check that income, expenses and credits are accurate.
Being selected does not suggest an error or dishonesty. The publication says returns are chosen by computerized screening, random sample or income document matching, and that many examinations end in a refund or acceptance without change.
If you are asked about the travel deduction, expect to be asked to show the expenses behind it: the mileage log, the lodging receipts and the other documents above. (That is our expectation, not an IRS statement.)
Pub 556 also describes the burden of proof: the IRS generally carries it for a factual issue if you introduced credible evidence, complied with all substantiation requirements, and maintained all records the Code requires. Keeping records is the third condition.
What the IRS text does not tell us
The IRS publications we reviewed do not say whether a mileage log rebuilt later from your orders and a mapping service is good enough. They say only that records should be timely and accurate and that estimates are not deductible. If you must rebuild a year, use documents someone else created, say in your notes that it is a reconstruction, and consider asking a tax professional.
Related guides
- Mileage Records That Hold Up - a trip-by-trip log
- Which Trips Count - what belongs in the record
- Airfare, Rental Cars, Tolls and Parking - receipts beyond mileage and lodging
- Common Mistakes - record-keeping slips
- Amending Past Returns - fixing an earlier year
- All guides - browse every guide by what you need to do
Sources
- IRS Publication 463
- IRS Publication 3
- IRS Publication 583
- IRS Publication 556
- IRS Tax Topic 305, Recordkeeping
- Form 2106
- IRS: File an amended return