If you drive for work, mileage tracking is an indispensable part of your day. Tracking every work trip ensures that you maximize your tax deduction. You need to keep records of your driven miles and submit them to the IRS in case you are audited, as the IRS requires that you keep adequate, timely records of your mileage.
Adequate records should contain the following:
The IRS also requires that you log your miles in a timely fashion - basically, at or close to the time of the trip.
There are a few ways you can track your mileage, including a paper log, a spreadsheet and a mobile app.
You can use a paper log or a spreadsheet to track the miles you’ve driven near the time of the trip - e.g. after each trip or at the end of the workday. You should always include the required details for each trip as described above - not just the distance, but the time, destination and purpose of the drive. If you drive often, it can take a while to write down every trip detail, and of course, we’ve all forgotten to record trips in the past! In this case, a mileage tracking app could be just the solution for you.
Apps for tracking mileage can track your driving in real-time and save you the hassle of inputting information about every drive you take. You simply open the app and start tracking - the app will then record your trip while you are driving. Once you finish your trip - simply stop the app from tracking - you’ll have a recorded trip including the start and end time, start and endpoints, and you’ll be able to specify the purpose of your trip.
Some apps for keeping track of mileage offer automatic tracking too - no need to even open the app. By pairing the Driversnote app with an iBeacon - a low energy Bluetooth device that you place in your car - Driversnote offers a proven automatic tracking solution. The iBeacon will prompt your phone to start tracking a trip every time you get in your vehicle and start driving. When you exit your vehicle, the app will stop recording your trip. You’ll have all of the required information, as well as a very timely record of your trips.
Now that you know what you need to log for your mileage deductions, let’s see how you calculate mileage for your tax return.
Calculating mileage for tax purposes is an easy task if you’ve been recording your mileage regularly throughout the year. You’ll need the total miles you’ve driven for business and the standard IRS mileage rate. Grab a calculator and you can simply multiply the miles by the IRS mileage rate - the result is the size of the deduction you can claim.
If you are using a mobile app to track mileage, the app will do the calculation for you - you’ll also be able to create compliant reports to keep as proof of your mileage claim.
Few things will make your accountant happier than receiving adequate, consistent mileage documentation for your tax return year after year - and an app will help you do exactly that!
Using an app will remove the task of organising and keeping mileage logs from your hands - mileage tracker apps will keep the information for you and your full mileage log will be just a few taps away at any time.
If you’re using paper or spreadsheet mileage records, make sure to properly save and file them - the IRS states that records should be kept for 3 years from the date of filing your tax return in case of audits.
If you use Driversnote to log your mileage, you can rest assured that we retain your tracked trips for as long as you keep an account with us - regardless of whether you have a paid subscription or a free account, your data is safe with us.