An easy way to reduce your tax bill can be by tracking your mileage. Let’s catch you up on what mileage tracking is and the ways it can benefit you.
Mileage tracking refers to keeping a mileage log for reimbursement or for tax deductions. For 2022, your business miles are worth 58 cents per mile which is a 2.5 cent increase from 2020. Don’t forget to keep an accurate mileage log that tracks all your business miles driven. Most employers require a log so that they know the amount of mileage reimbursement they owe you.
The IRS lets you deduct mileage for business, charity, moving and medical purposes. It’s understandable that there’s a cost associated with using your personal vehicle for business purposes. This is why you are able to collect a mileage reimbursement.
Let’s go over the specific cases that the IRS considers to be business drives:
Remember, however, that the IRS does not let you include your commute to work in the miles you are able to deduct. The location where you live relative to your workplace is considered a personal choice, so driving to work is not deductible.
In order to receive your cash back, the IRS requires you to document your miles. You can do this by using a mileage log template, a handwritten log, or an easy to use mileage-tracking app like MileIQ. Millions of people rely on MileIQ because it provides automatic mileage tracking. With MileIQ, your smartphone will use Wi-Fi, GPS, and mobile data to track your business drives throughout the work week. Our mile-tracking app takes the tedious, detailed logging off your plate so that you don’t have to attempt to recall where you whent, on what day, and for what purpose. This means you can focus on your business while making sure you’re getting the largest possible deduction for your mileage.
In 2022, self-employed workers are able to write off business miles, while W2 employers are no longer able to do so in response to the tax reform bill of 2017. If you qualify for deductible mileage, luckily there is no set limit on how many miles you can claim on your deduction as long as they are supported by sufficient records and logs. With the use of a mile-tracking app, like MileIQ, you can ensure that your drives are classified, your locations are named properly, and that every mile is organized in accordance to the time and date.