Log or Lose It and Ospreys
In this edition of the Flying Point Update we're going to talk about why vehicle mileage logs are non-negotiable, the difference between the two ways to deduct vehicle costs, and a very large stick nest not far from our house.
Top of Mind
I want to say something simple, and then I want to say it three more times in slightly different words, because it’s important.
If you use a vehicle for work, log your miles.
If you want to take any kind of vehicle-based deduction, log your miles.
If you have a vehicle that's used solely for business, log your miles anyway.
If you have one vehicle that does double duty - client meetings on Tuesday, soccer pickup on Wednesday - log your miles, because that's the exact situation the log exists to sort out.
Notice a pattern? Vehicles are one of the most mis-understood areas of the tax code for small business owners. I believe you drove somewhere. I even believe it was for business. But belief isn't a substantiation standard, and this is one of the few corners of the tax code where I genuinely cannot help you after the fact.
If you're not already tracking miles, the best time to start was January. The second-best time is today. I know its a pain, but it adds up to real money. A phone app, a paper notebook in the glovebox, a spreadsheet, whatever works - just start.
Worth Knowing
There is a reason I’m being blunt on this point. Longtime readers may remember that vehicle mileage is one of the few categories where the Cohan rule doesn't apply. We covered this back in Burden of Proof and White-Footed Mice. IRC Section 274(d) requires a contemporaneous log with the date, destination, business purpose, and miles driven, and there's no estimating your way around it. No log, no deduction, full stop.
There are two ways to deduct vehicle costs, and the log matters for both of them. The standard mileage rate multiplies your business miles by a rate the IRS sets each year - simple, and it's why most people default to it. (Worth noting: the IRS made a rare mid-year adjustment this year, from 72.5 cents to 76 cents per mile effective July 1st, so 2026 logs need to track which half of the year each trip falls in.) The actual expense method instead tracks your real costs - gas, insurance, repairs, depreciation - and deducts the business-use percentage of those costs, a percentage that comes directly from the mileage log. Either way, the log is what proves you're entitled to the deduction at all.
Here's where it gets a little more interesting: not every vehicle is treated the same, and "heavy" doesn't mean "exempt from documentation." Vehicles over 6,000 pounds gross vehicle weight escape the passenger-auto depreciation caps under IRC Section 280F. Without getting too into the weeds, a heavy pickup or large SUV can often get a much bigger first-year deduction than a sedan which is why you’ll see tax strategies around buying big trucks. But the vehicles are still considered listed property, still need the mileage log, and still need substantiated business use above 50% for Section 179 or bonus depreciation. The only vehicles that actually skip the listed property rules are ones modified so personal use is essentially impossible - permanent shelving, no rear seating, always loaded with equipment.
My neighbors own and operate a plumbing company, Osprey Plumbing and Heating, and their two work vehicles make the distinction concrete. The cargo van is permanently outfitted with shelving and racks for fittings and pipe, and never really goes anywhere except job sites and the supply house - a strong candidate for that "qualified non-personal use" exemption, since nobody's taking a van full of copper fittings to soccer practice. Scroll down on the website and you’ll see exactly what I’m talking about. Their company-branded pickup truck is a different story - they drive to client sites, but also for use it for things like errands around town and hauling a boat to the lake. Branded or not, it's a listed asset, and they needs to actually track business versus personal mileage on it if they wants to take any business use deductions. The logo on the door doesn't do the documentation for him.
If you take just one thing away from this it should be if you use a vehicle for work, log your miles.
Mark Your Calendar
September 15th: Q3 estimated tax payments are due. This is also the final deadline for calendar-year S-corp and partnership returns that were extended back in March.
October 15th: Final deadline for individual returns filed on extension.
Maine Wildlife Facts
There's an osprey nest not far from our house. Its a genuinely enormous pile of sticks perched on top of a telephone pole not to be confused with previously mentioned plumbing company. It’s the kind of structure that looks like it shouldn't be able to stay up there and yet has clearly been doing so for years. It's a good one if you're looking for an easy field trip with kids: no hiking required, and the payoff is immediate.
Ospreys are sometimes called fish hawks, and for good reason - fish can make up to 99% of their diet. They hunt by hovering high over the water, sometimes over 100 feet up, before folding their wings and diving talons-first. Their feet are built specifically for the job: a reversible outer toe that lets them grip with two talons forward and two back, plus spiny pads on their feet that work like a built-in non-slip grip on a wet, thrashing fish. Once they've got one, they carry it headfirst, which the wind apparently prefers.
Ospreys generally mate for life and return to the same nest year after year, adding more material each season. Over time those nests can grow to a genuinely absurd size - some have been recorded at close to 400 pounds. Ours isn't quite there yet, but it's clearly a work in progress.
Come fall, most of the ospreys that nest in Maine will head south, and a majority of eastern birds end up in South America - a round trip of several thousand miles for a bird you can watch fishing in your own backyard all summer. Ospreys also have a distinctive call - a series of short, high-pitched whistling chirps, nothing like a bald eagle's. All three kids can pick it out now before anyone's even spotted the bird.
These Maine wildlife facts have been brought to you by Will (7), Frank (4), and Catherine (2), Flying Point Advisors' on-staff naturalists.
Questions about any of this? Just reach out - I read every email and love hearing from you.
Thanks for reading. You'll hear from me again in about two weeks.
- Mike
Disclaimer
The Flying Point Update is provided for general educational and informational purposes only. The content in this newsletter reflects my thoughts and observations on tax, accounting, and financial planning topics, but should not be considered personalized tax, accounting, or investment advice for your specific situation.
Tax laws are complex and change frequently. The information presented here is based on current tax law as of the publication date and represents general concepts that may not apply to your circumstances. Every individual and business has unique factors that affect their optimal tax and financial planning strategies.
Before making any financial decisions or implementing any tax strategies discussed in this newsletter, please consult with a qualified tax professional, CPA, or financial advisor who can evaluate your specific situation. If you'd like to discuss how any of these topics might apply to your circumstances, I'm always happy to chat.