Taxes
What Is Mileage Tracking? Why Should You Do It For Taxes?
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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.
What Is Mileage Tracking?
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.
What Counts As Deductible Mileage?
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:
- Customer visits / Client meetings
- Trips between offices or workplaces
- Traveling from home to a temporary job site outside of your permanent work location where you expect to work for no longer than a year
- Drives to and from odd jobs, such as babysitting
- Customer meals and entertainment
- Trips to the airport for business travel
- Drives for errands and to the store for supplies
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.
