You might think you know everything there is to know about mileage tracking, but the IRS is rather specific on how it's done. All drivers should maintain a contemporaneous mileage log if they haven’t done so already. In fact, you are missing out on potential tax savings by not tracking mileage in this manner. Find out more about a contemporaneous mileage log and just how easy it is to start keeping records for the IRS.
The simplest way to earn big savings on your tax deduction is through mileage tracking. Qualified drivers can use the standard mileage method to add up car expenses and take a deduction for those costs. For 2022, the IRS mileage rate is 58.5 cents per mile driven for business use. That said, it’s important to realize you cannot use the standard mileage rate unless you have adequate records of your miles. The IRS wants you to record:
Documenting all this information is the foundation to a contemporaneous mileage log. In essence, a “contemporaneous” record means you keep your drives accurate and up-to-date for each business trip. Inconsistent mileage tracking creates an opportunity for a tax examiner to question your mileage deduction.
The best advice — don’t let this happen to you! Should you forgo keeping an accurate mileage log, it will make your tax preparation process much more difficult. Lack of such records requires you to provide oral testimony that is backed by documentation. This includes receipts, invoices, and emails that validate your mileage deduction. In other words, you can’t estimate mileage deduction. If the IRS audits you, an examiner will ask to see your records. In the instance you don’t have reliable records, your mileage deduction will be rejected.
Having this knowledge should compel every self-employed, independent contractor, and eligible driver to maintain a proper mileage log each year. Before you say, “I don’t have the time or patience to keep up with mileage tracking,” think again. MileIQ has got you covered.
Many taxpayers want to make the most out of their mileage deduction, but don’t know how. With a contemporaneous mileage log, you’ll have every trip documented from start to finish. What’s more, an automatic mileage tracking app like MileIQ qualifies as a contemporaneous mileage log. This means it has the IRS’ stamp of approval!
Some drivers think they can tackle contemporaneous mileage tracking on their own, but the truth is life happens. Human error can conveniently get in the way. That is why MileIQ is totally worth the investment. Compared to other mileage tracking apps, MileIQ offers the best bang for your buck. Start off with the free trial that includes up to 40 drives and you’ll soon find out why. There’s no need to overthink your mileage. Once you’ve downloaded the app onto your mobile device, automatic mileage tracking begins and digitized reports are maintained for your tax records.
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