When you’re constantly in your car for work — going to and from client meetings, out-of-the-office consultations and the occasional trip out of town — keeping track of the miles you spend on the road can be challenging. But for those who are self-employed, keeping diligent records of these work-related rides could mean hundreds or thousands of dollars in savings a year, as the IRS mileage rates are 54 cents per mile for business miles driven. In 2017 this will change to 53.5 cents per mile.
Using a mileage tracking app makes it easy to keep an accurate record of time spent on the road so you can confidently deduct these expenses when you file your taxes. Here’s what you need to know.
All the Ways You Benefit by Tracking Your Mileage with an App
While miles may be deducted as an expense, the full cost of operating your vehicle during business may also be deducted, The Balance reports. To do this, you’ll need to save receipts for items such as oil changes, insurance, repairs, etc., to include in your return. Using a mileage tracking app that also has a receipt capture feature, like the QuickBooks Self-Employed app, allows you to use one device to easily monitor all your vehicle usage.
Business mileage tracking will vary slightly depending on the type of employment you have. For example, if you are self-employed, you can deduct mileage when meeting with various clients and even when doing pro bono or charity work. You can also deduct any business miles — driving that takes place only for business — driven from home if you you have home office. Small business owners or employees of a company, on the other hand, won’t be able to deduct miles driven from home to the office and back.
When keeping track of your mileage, date of travel, purpose and to-and-from locations will all need to be impeccably recorded for accurate deductions. Without using an accurate mileage app, you run the risk of getting audited and incurring penalties or not being paid what you’re owed.
Those who are self-employed especially know the meaning of the adage “time is money.” Quickly adding travel data to an app is much easier than having to track down records later. With an app, the info you need is always there, so you don’t have to worry about misplacing your logs. Plus, you’ll have a digital record of your mileage so you won’t have to spend more time inputting each log into a computer later.
Using an app can also equate to substantial time savings. For those who are too hurried or hassled to record every trip with pen and paper, using a mileage app ensures every mile is taken into account. If you take several business trips a week that are only a few miles each, using an app to record each one can result a meaningful return in the long run.
Make Your Mileage Work for You Now
There are many mileage tracking apps on the market, but not all are created equal. To comply with IRS business mileage standards, download the QuickBooks Self-Employed app, which automatically tracks mileage and integrates with other deduction tracking, streamlining your business management and keeping you protected and prepared for tax season.
Named a top mileage tracking app on The Rideshare Guy, the app allows for easy categorization based on business or personal trips. Plus, it won’t drain your cellphone battery, which is often a major hassle found with many GPS mileage tracking apps.
Information may be abridged and therefore incomplete. This document/information does not constitute, and should not be considered a substitute for, legal or financial advice. Each financial situation is different, the advice provided is intended to be general. Please contact your financial or legal advisors for information specific to your situation.
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