Record Keeping and Bobcats
In this edition of the Flying Point Update we're going to discuss tax record keeping requirements, dive into vehicle mileage logs, and learn about Maine's elusive bobcats.
Top of Mind
As we move into the final stretch of 2025, I'm fielding the usual wave of year-end tax questions. One that comes up every year: "What records do I actually need to keep?"
It's a fair question, and the answer matters more than most people realize. The IRS doesn't just expect you to keep good records—they require it. IRC Section 6001 explicitly states that taxpayers must "keep such records as the Secretary may from time to time prescribe" to verify the information on their tax returns.
The basic philosophy is straightforward: if you claim something on your tax return, you need to be able to substantiate it. That doesn't mean keeping every shred of paper that enters your house, but it does mean maintaining reasonable documentation to prove your claims.
For businesses, this extends to bookkeeping records themselves. IRC Section 446 and its related regulations actually mandate that you maintain adequate business books and records. Your QuickBooks file or accounting ledger needs to be more than a collection of rough estimates. The records need to reflect actual transactions, supported by invoices, receipts, bank statements, and other documentation. These records don't necessarily have to be presented to me, your CPA—though I certainly conduct my own due diligence where warranted—but you do need to keep them available to substantiate the numbers should the IRS come asking.
The key word throughout all of this is "reasonable." The tax code doesn't require perfection. It requires reasonable documentation of your income and expenses. A shoebox full of crumpled receipts technically meets the requirement, though it's not exactly a pleasant way to operate. A well-organized digital filing system is better.
What happens if you can't substantiate deductions? The IRS can disallow them entirely. They're not obligated to estimate or give you the benefit of the doubt. No documentation means no deduction, and you'll owe additional tax plus potential penalties and interest.
The standard retention period is three years from the date you filed your return, though some situations require longer retention. Employment records should be kept for at least four years. Records related to property should be kept as long as you own the property plus the applicable statute of limitations. An important caveat is that the IRS can go back indefinitely if you fail to file or knowingly file a fraudulent return—though that's hopefully not relevant for anyone reading this newsletter.
Here's my practical advice: keep records for at least three years as a baseline, longer for anything related to property or substantial transactions. Use a consistent system, whether that's physical folders, digital scans, or a combination. The goal isn't perfection—it's having a reasonable, organized way to support what you're claiming on your tax return.
Worth Knowing
Speaking of record keeping, let's talk about one of the most commonly claimed—and most commonly scrutinized—deductions: vehicle mileage.
If you claim vehicle expenses on your tax return, whether as a business owner deducting mileage or an employee with unreimbursed vehicle expenses, the IRS has specific requirements for substantiation. Unlike many other business expenses where a receipt and reasonable documentation suffice, vehicle expenses require what's known as "adequate records" under IRC Section 274(d).
What does that mean in practice? You need a mileage log. Not a vague recollection or a rough estimate based on how often you think you made business trips. An actual contemporaneous log that documents:
The date of each trip
The business destination
The business purpose
The miles driven
The gold standard is a detailed log maintained in real time, either in a physical notebook or using one of many mileage tracking apps available. Each trip gets its own entry with all four elements documented. For someone who drives frequently for business, this becomes habitual fairly quickly.
But let's be realistic. Not everyone maintains a perfect real-time log. If you've got a regular routine—say you drive to the same client site every Tuesday, or you make delivery runs along the same route—you can document the pattern and use that to support your deduction.
Here's what a reasonable mileage log should look like at minimum:
Sample Basic Mileage Log:
Date: 11/5/2025
Destination: Client meeting - ABC Corporation, Portland
Purpose: Quarterly financial review
Miles: 47 (round trip)
Date: 11/7/2025
Destination: Networking event - Maine Technology Institute, Brunswick
Purpose: Business development
Miles: 38 (round trip)Compare that to the gold standard, which might include additional details:
Sample Detailed Mileage Log:
Date: 11/5/2025
Start odometer: 45,203
End odometer: 45,250
Destination: ABC Corporation, 100 Commercial Street, Portland, ME
Purpose: Q3 financial review meeting with CFO regarding tax planning strategies
Miles: 47
Notes: Stopped for gas (personal expense, not logged)The difference? The detailed version provides an audit trail that's nearly bulletproof. The basic version is still reasonable documentation that would likely withstand scrutiny, especially if consistently maintained throughout the year.
What doesn't work: a single entry at the end of the year saying "approximately 5,000 business miles." That's an estimate, not documentation, and the IRS can—and frequently does—disallow it entirely.
If you're self-employed or own a business with significant vehicle use, start the habit now for 2025. Pick a method—phone app, paper log, or digital spreadsheet—and use it consistently. Even a reasonable system maintained for throughout the year is better than nothing, and it's significantly better than trying to reconstruct everything in April when you're scrambling to file your return.
Mark Your Calendar
January 15th, 2026: Q4 2025 estimated tax payments due
January 31st, 2026: Deadline for businesses to issue W-2s and 1099s to employees and contractors
We still have seven weeks left in 2025. If you haven't had a year-end tax planning conversation yet, now is the time to schedule it. We can review estimated payments, discuss potential strategies, and make sure your record keeping is in order before the calendar flips.
Maine Wildlife Facts
Last week I saw something I've been hoping to see for years: a bobcat. I was walking along an old grown over logging road in the woods not far from our house when it crossed maybe 30 yards in front of me, paused briefly in the middle of the road, and then disappeared into the woods. Miraculously, I managed to grab a photo before it vanished.
Will and Frank were not with me, unfortunately, but they've been absolutely fascinated by the picture and have been peppering me with questions ever since. We've learned quite a bit about Maine's most elusive wild cat.
Bobcats are surprisingly common in Maine but they're rarely seen due to their secretive nature and preference for dense cover. They're roughly twice the size of a large house cat, weighing 15-35 pounds, with distinctive tufted ears, a short "bobbed" tail (hence the name), and spotted fur that provides excellent camouflage.
What's remarkable is how adaptable they are. Bobcats can thrive in forests, swamps, and even suburban areas as long as there's adequate cover and prey. They're solitary animals with large home ranges—a male's territory can span 25-50 square miles. They hunt primarily at dawn and dusk, feeding on rabbits, squirrels, birds, and occasionally deer (usually fawns or weakened adults).
Unlike many wild animals, Maine's bobcat population is actually increasing. Improved forest management, abundant prey, and legal protection (bobcat hunting and trapping are regulated but permitted) have helped maintain healthy population levels. The boys were particularly impressed to learn that bobcats are expert climbers and swimmers, and they can leap up to 12 feet to catch prey. Will, in particular, loved the fact the bobcats will sometimes ambush turkeys by leaping out of trees!
Will has declared that spotting a bobcat is now his primary mission for our woods walks, though I've tried to manage expectations about how rare sightings actually are.
These Maine wildlife facts have been brought to you by Will (7) and Frank (3), 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.