Relax -- a bit -- on recording auto mileage. Congress has let up on detailed logs to get tax deductions for business trips, but care is still called for
You can put away the log book. If you have been faithfully keeping exact mile-by-mile auto records of every business trip in order to have the ``contemporaneous'' records required by last year's tax act, you can now go back to keeping ``adequate'' records for business use of personal and company cars. Under heavy pressure from business groups and farmers, Congress has repealed that part of the 1984 law. Those adequate records, though, should be as complete as you can make them, since the Internal Revenue Service is going to be looking harder for people who might fudge figures on deductions like this.
In an effort to recapture an estimated $1 billion in taxes that was being avoided by the older, looser recordkeeping rules, Congress last year required people to keep detailed records of every business-related trip, including the date of the trip, its purpose, and the exact number of miles driven as indicated by before-and-after odometer readings.
Anything less would mean taxpayers could not claim these costs as business expenses and, if they tried to, could be hit with a penalty.
The pressure to repeal, though, was intense and effective.
One of the most common examples cited was of a farmer who might combine a trip to the feed store with dropping off a child at school. He would have had to figure out how many of the miles counted toward the deductible feed-store trip and the nondeductible child taxi service. The bill also eased recordkeeping requirements for home computers.
The repeal measure, which easily passed its final congressional hurdle May 16, is expected to be signed by President Reagan.
But that event should not be seen as an opportunity to ``guesstimate'' the number of business-related miles.
``In essence we're back to the rules that were always on the books prior to '84, but were never well enforced,'' says Thomas Ochsenschlager, a tax partner at Alexander Grant & Co., an accounting firm. ``But I see the  act as an admonishment to the IRS to improve its enforcement.
``You still have to retain some sort of records. In fact, I would hang on to that log book and continue to keep it up to date.''
While such exact mileage records may not be necessary now, they can certainly be helpful should a letter arrive from the now-admonished IRS inviting you to an audit.
Short of that, you should have some other corroborating evidence, which might include an appointment calendar, receipts for meals and lodging, or sales records for goods purchased or sold.
For mileage, you may be able to use a table from a road atlas that gives the distances between points, says Thomas Feichter, a tax partner at Coopers & Lybrand, another accounting firm.
While this is helpful for people who do a lot of driving between cities, it's not much good for those who do most of their traveling within a city or a metropolitan area. These people, then, should stick to closer recordkeeping.
In some cases, the IRS may accept oral testimony to back up your claims, if it is backed by some other evidence, such as a receipt or calendar from the client or business associate, Mr. Feichter says. But those instances will probably be rare and you should not depend on them, he adds.
If it's the company car you are using, there are some other changes to be aware of. The repeal bill allows an employer to choose not to withhold income taxes on the value of a worker's use of a company car. But the worker is still required to pay taxes on the imputed, or deemed, value that use represents.
Even though the employer may decide not to withhold taxes for that value, it still must be shown on W-2 forms handed out next January. So people using company cars may find they owe taxes when they thought they might be getting a refund.
``You can do a little tax planning'' to avoid problems with this, says Robert Pullen, director of marketing at Leaseway Fleet Management Corporation, a Cleveland-based lessor of fleet vehicles to large corporations.
To keep the benefit of a company car without worrying about a tax bill, you could set aside a little more in savings each month, add to an individual retirement account if you are not up to the limit, or claim one or two fewer adjustments to income on the W-4 form, which will result in a little more withholding.
Another change was an effort by Congress to offset the expected loss from less strict recordkeeping. Here, the lawmakers further limited the tax advantages of buying a car that is used entirely for business.
Before 1984, you could depreciate such a car over a three-year period no matter how expensive it was, by deducting 25 percent the first year, 38 percent the second year, and 37 percent in the third. Thus, a business owner could write off even a $100,000 car in just three years.
The 1984 law permitted a $4,000 deduction the first year, and $6,000 each year thereafter until the car was fully depreciated.
Now, the deduction is $3,200 the first year and $4,800 each year after that. You can still depreciate the car fully; it just takes longer. ``Congress has finally learned the time value of money,'' Mr. Ochsenschlager notes.
As for home computers, ``the new law hasn't changed how we're going to have to keep records'' for them, says Sam Starr, also of Alexander Grant. ``You need to maintain some kind of log'' to separate time spent on business work from time spent paying your family's bills or playing games.
Most people will probably do this by keeping a sheet of paper next to the computer, Mr. Starr says, although software is available for some models which lets you keep a similar record within the computer.
If you would like a question considered for publication in this column, please send it to Moneywise, The Christian Science Monitor, One Norway Street, Boston, Mass. 02115. No personal replies can be given by mail or phone. References to investments are not an endorsement or recommendation by this newspaper.