Drive up mileage deductions

Whether you’re driving part-time, full-time, or occasionally making deliveries, mileage can be one of the largest tax deductions for a small business.

Manage 1099 contractors with QuickBooks

Track mileage automatically

Track payments to 1099 contractors throughout the year

Automatic GPS tracking

Easier than doing nothing. Just drive, and we’ll use your phone’s location to detect when you’re driving. Or, add a trip manually.
Automatic GPS tracking

Swipe left for business miles

Easily categorize individual trips as business or personal to accurately rack up potential tax deductions.
Track payments to contractors for year-end 1099 forms

Detailed mileage reports

See the breakdown of miles and potential deductions. Plus, it’s easy to share when you need to.

Bring your miles with you

As your business grows, you can automatically transfer your current mileage from QuickBooks Self-Employed to QuickBooks Online.

Flexible QuickBooks Online plans for your business

Flexible QuickBooks Online plans for your business

Simple Start
25 60105 60
12 30 53 53
/mo
Save 50% for 3 months
  • Track income & expenses
  • Capture & organize receipts
  • Maximize tax deductions
  • Invoice & accept payments
  • Track milesNEW
  • Run basic reports
  • Send estimates
  • Track sales & sales tax
  • Manage 1099 contractors

  • Enhanced Payroll

    Add $35 $ 18 /month
    + $4/employee/month

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Simple Start
25 60105 60
12 30 53 53
/mo
Save 50% for 3 months
  • Track income & expenses
  • Capture & organize receipts
  • Maximize tax deductions
  • Invoice & accept payments
  • Track milesNEW
  • Run basic reports
  • Send estimates
  • Track sales & sales tax
  • Manage 1099 contractors
  • Manage bills
  • Track time
  • Includes 3 users

  • Enhanced Payroll

    Add $35 $ 18 /month
    + $4/employee/month

  • Full Service Payroll

    Add $ 80 $ 40 /month
    + $4/employee/month

Simple Start
25 60105 60
12 30 53 53
/mo
Save 50% for 3 months
  • Track income & expenses
  • Capture & organize receipts
  • Maximize tax deductions
  • Invoice & accept payments
  • Track milesNEW
  • Run basic reports
  • Send estimates
  • Track sales & sales tax
  • Manage 1099 contractors
  • Manage bills
  • Track time
  • Includes 5 users
  • Track project profitability
  • Track inventory

  • Enhanced Payroll

    Add $35 $ 18 /month
    + $4/employee/month

  • Full Service Payroll

    Add $ 80 $ 40 /month
    + $4/employee/month

Simple Start
25 60105 60
12 30 53 53
/mo
Save 50% for 3 months
  • Track income & expenses
  • Capture & organize receipts
  • Maximize tax deductions
  • Invoice & accept payments
  • Track milesNEW
  • Run basic reports
  • Send estimates
  • Track sales & sales tax
  • Manage 1099 contractors
  • Manage & pay bills
  • Track time
  • Includes 25 users
  • Track project profitability
  • Track inventory
  • Smart reporting powered by Fathom1
  • Accelerated Invoicing2
  • Custom user permissions
  • Premium care with Priority Circle3
  • Enhanced custom fieldsNEW

  • Enhanced Payroll

    Add $35 $ 18 /month
    + $4/employee/month

  • Full Service Payroll

    Add $ 80 $ 40 /month
    + $4/employee/month

Important offers, pricing details & disclaimers

How to calculate your mileage deduction

There are two ways to calculate your business mileage deduction — the standard mileage method and the actual expense method. You won’t be able to take both deductions, so choose the method that best fits your work.

Standard mileage method

Use the standard mileage method to calculate the amount of business mileage you can claim on your tax return. Just multiply your total business miles for the year by the standard mileage rate.
See all mileage rates

Standard deduction calculator

Enter business miles driven for year
Calculate your deduction
0Standard deduction

This tool is only an example and not to be used as tax guidance.

Actual expenses method

The actual expenses method is more complex, but it may result in a bigger tax deduction for you. With this method, you can deduct vehicle-related costs if at least some of your driving is for business purposes.
Prepare the 1099 tax form

How to choose the best mileage deduction method

How to choose the best mileage deduction method

By logging miles and keeping records of your vehicle expenses, you can calculate which method will give you the biggest tax deduction at the end of the year. QuickBooks Online makes it easy to automatically track your mileage and expenses year-round, and get estimates of your standard deduction.

Deduction method comparison tool

Enter total miles driven for year
Enter percentage of miles driven for business and actual expenses
Calculate your deduction
0Standard deduction
0 actual method
This tool is only an example and not to be used as tax guidance.

Points to remember

  • Once you use the actual expenses method, you cannot revert back to the standard mileage rate in the future.
  •  In the first year you drive your vehicle (whether leasedor owned) for business, you’ll need to use the standard mileage rate method.
Points to remember

Keep up with standard mileage rates

Every year, the IRS publishes the standard mileage rates for calculating mileage deductions.4

Mileage rate 2019

The 2019 rate is 58 cents per business mile. Simply multiply the total business miles you drove last year by the standard mileage rate. Then, claim that number on your tax return as your business mileage tax deduction.

Previous standard mileage rates

Compare rates that the IRS published over the past few years.5
2019: 58 cents per mile(For 2019 taxes filed by April 15, 2020)
2018: 54.5 cents per mile
2017: 53.5 cents per mile
2016: 54 cents per mile

Make every mile count

Track mileage to get the biggest tax deduction you deserve.Think of the mileage tracking app as a hands-free digital mileage log.

Mileage logs

A mileage log is a written record of your trips that you submit with your business mileage deductions.The IRS requires that you keep your mileage logs for three years—whether a paper-and-pencil mileage log you keep in your glove box or a digital mileage log stored on your phone.

Get started with QuickBooks mileage tracking

The QuickBooks mobile app acts as a digital mileage log by tracking and categorizing the miles you drive for work.Using a mileage tracker app like QuickBooks Online ensures that your business mileage is recorded in real time and organized so that it’s not lost or forgotten when you need it. At tax time, you have all the details necessary to claim your mileage deduction.Download the QuickBooks mobile app from the Apple App Store or Google Play Store
Get started Get started

What is mileage tracking?

By QuickBooks
Mileage tracking refers to keeping a log of miles driven for tax deduction or reimbursement purposes. For 2019 tax filings (that are due by April 15, 2020), you can claim a 58-cent deduction per business mile. That means every mile driven to meet clients, run business errands, or grab work supplies will add up to one thing: cash, either deducted from your taxes or reimbursed after you file. Rideshare drivers, photographers, Etsy shop owners — anyone who is self-employed or runs a small business — we’re talking to you. Here’s a rundown on everything you need to know about tracking business and personal mileage for your taxes.

What counts as deductible mileage?

First, determine what qualifies as business mileage. The IRS has strict rules about what counts and what doesn’t. For example, traveling between offices and worksites, driving to meet a client for drinks or heading to the store for business-related supplies counts. But commuting anywhere from home doesn’t — even if you’re taking a business call in the car or going into the office to meet a client.

How to track your business mileage

Keep track of each trip, because if you are ever audited, the IRS expects pristine records. One simple method is to use paper and pencil. It should show the date, destination, business reason for the trip, odometer readings, and total mileage. You just need to do a lot of calculations when you are adding everything up. As long as you can remember to do this every single time, you will be fine.
Improve inventory turnoverImprove inventory turnover
The easiest and most effective way to do this is to use a mileage app on your smartphone to track it all for you. Mileage tracking in the QuickBooks mobile app is unique because it automatically tracks mileage and integrates it into QuickBooks with your other deduction tracking.
 The app automatically determines start and stop locations based upon your time in transit and the amount of time you spend at a location. Just like how the app handles expense categorization, you can swipe left for business miles or right for personal miles when the tracked mileage is logged.

Standard mileage rate vs. actual expense method

Once you have a record of your miles, you can determine the amount you can deduct. There are two ways to determine this: the standard mileage rate method or the actual expense method.
Qualifications for the standard mileage rate method vary depending on if you own or lease the car and for how long, as well as what claims you’ve made on the car in years past.
The IRS provides a helpful list of driving activities that qualify as business use, which include:
    • Travel between business locations (not between home and work)
    • Business errands
    • Travel to business meals
    • Travel to business entertainment
    • Drives to the airport for business travel
    • Customer visits
    • Travel to temporary job sites
    • Travel to job interviews
    • Tolls and parking during business trips
 
If you qualify to use this method, you simply multiply your business miles by the applicable standard mileage rate, which in 2018 is 54.5 cents per mile. For example, if by the end of the year you’ve driven 25,000 miles, your total mileage deduction will be $13,375.
25,000 miles x 54.5 cents/mile = $13,625
If you want to use the standard mileage method, you have to do so for the first year that you drive for work. Afterwards, you can choose between the standard mileage method and the actual expenses method. Keep in mind that if you choose the standard mileage method, you can’t deduct any other vehicle expenses.
To use the actual expense method, you have to determine what it costs to operate the vehicle for your business use. The IRS lists a number of vehicle expenses that you can claim if you use your vehicle for work. You cannot deduct fines—such as speeding tickets—that you incur while driving for business.
Legitimate expenses include:
    • Depreciation
    • Lease payments
    • Registration fees
    • License fees
    • Gas
    • Insurance
    • Repairs
    • Oil
    • Garage rent
    • Tires
    • Tolls
    • Parking fees
    • Damages not covered by insurance payments
    • Theft not covered by insurance payments
 
The IRS requires that you substantiate your business expenses with documentation, such as receipts, work orders, or other written records. For each expense, be sure to record the expense amount, expense date, place of service/purchase, and description.
If you qualify for both methods, you may want to calculate them both to see which will yield you the larger deduction. If you use QuickBooks Online, the app will do the standard mileage rate math for you.

Tracking mileage for medical, moving, and charity

While those who are self-employed have access to the highest deduction rate and fewest restrictions, that doesn’t mean there aren’t other reasons to track your mileage. For 2018 tax filings, those who qualify can deduct 18 cents per mile driven for medical or moving purposes, and 14 cents per mile driven in service of charitable organizations. Since the app tracks everything and lets you categorize, QuickBooks Online can handle this, too.
The QuickBooks mobile app is a great way to track mileage. With it, you can also determine your quarterly tax liability and fill out the current IRS forms for making those payments. Explore the app’s time- and money-saving features, including automatic tax tracking, snap and store receipts, expense tracking, effortless invoicing, and more.

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