Mileage tracking refers to keeping a log of miles driven for tax deduction or reimbursement purposes. For 2017 tax filings, you can claim a 53.5-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. Uber drivers, photographers, Etsy shop owners — anyone who is self-employed — 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. You could use paper and pencil, and the IRS has examples of worksheets that can be used for tracking business expenses here.
The easiest and most effective way to do this is to use an app to track it all for you. The mileage tracking app for QuickBooks Self-Employed 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, all the while using almost no excess battery life. 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.