There are a few methods you can use when it comes to tracking mileage for taxes. Let's compare how using a paper mileage log stacks up against using a mileage-tracking app like MileIQ.
What Does Your Mileage Log Need?
If you plan to deduct mileage on your taxes, you'll need a mileage log. The IRS wants your mileage log to have:
- The mileage of your trips
- The dates of your business trips
- The places you drove for business
- The business reason for your trips
The IRS also wants to know your starting odometer reading, your commuting miles and your personal, non-commuting miles for the year. You'll need this information whether you use a paper mileage log or MileIQ.
The Benefits Of A Paper Mileage Log
The main advantage of a paper mileage log is that it's very cheap to get started with. You can often find these on sale for less than $5.
A paper mileage log should also satisfy the IRS requirements for documentation if you ever face a dreaded audit.
The Disadvantages Of A Paper Mileage Log
There are many downsides to using a paper mileage log. The three main ones center around time, ease of use and recordkeeping.
Time: Jotting down your mileage after every trip takes up more time than you think. Remember, you technically have to track every trip, including your commute and personal ones. Sure, it may only take a minute after you've stopped your car but that's for every single trip, every single day.
That time really adds up over the course of the year.
Ease of use: Again, it seems pretty easy to scribble down your trip information but it can be tougher than it seems. First of all, you have to remember to write it down every single trip, every single time. This is true even if you're running late or in a bad mood.
Recordkeeping: A hand-written mileage log is proper documentation for your mileage deduction but that doesn't mean it's ideal. You or your tax pro will have to decipher your writing at the end of the year to calculate your deduction.
A paper mileage log is easy to lose or to destroy with a tipped-over cup of coffee. You don't have to submit it when you claim your deduction but you do have to keep your mileage log for up to seven years after you've claimed the deduction.
Are you confident your paper mileage log won't get lost or destroyed in the next seven years?
The Benefits of MileIQ
MileIQ is used by millions of people because it automatically tracks, logs and calculates the value of your mileage.
Automatic tracking: You don't have to remember to start and stop tracking, you just drive as you normally would and a mileage log will be created for you. If you forget your phone at home, you can always use the Web Dashboard to add in trips.
Get More Out of Your Miles: Your miles are worth a lot of money. But, that's only if you're properly tracking all of them. A paper mileage log means you may be forgetting to take a deduction for the miles you deserve. The average premium MileIQ user logs $6,900 a year in potential deductions.
Elegantly Designed: MileIQ is extremely easy to use. You don't have to worry about it tracking your mileage, as it does that in the background. When it comes time to classify, you can use the app to quickly swipe right for business or left for personal. You can also add all the details needed for a proper mileage log with just a few taps.
Robust, Secure Records: MileIQ provides reports that will satisfy your tax professional or business expense reimbursement manager. Simply tap a few buttons in the app and you'll have robust reports sent wherever you need them. You can also dive into the Web Dashboard for granular reports to fit your needs.
Because your data is securely stored in the cloud, you never have to worry about losing your mileage log. It will stay there for any future audits you may face. Even if you lose your phone with MileIQ on it, your data is never lost.
The Disadvantages of MileIQ
You do have to own an Android or iPhone to use MileIQ. For those without a smartphone, a mileage-tracking app is not the right solution.
MileIQ is always free for 40 drives a month, every month. But, if you want unlimited mileage logging, there is a small fee. This will cost more than a paper mileage log but the average Premium MileIQ user pays for the cost of the service in about two weeks worth of drives.
MileIQ Reviews From The App Store
Of course, you shouldn't take our word for it. Here is what a few users had to saw:
- "It's simple and effective, with a clean UI, and has nice sorting, tagging, and personalization options. Well worth the nominal subscription fee for anybody who does lots of work-related driving." - Zachary Schneider.
- "Today is the first day of using mile IQ and I love it! My tax preparer told me about it last night when I did my taxes since this is the first year of my small business and I can't believe how helpful it's going to be instead of writing down all the mileage!" - Katie Finnegan.
- "I love it! I'll actually have paperwork in front of me for the mileage I've driven for work so I can file it properly at the end of the year for my taxes" - Matthew Washington
