Taxes
Best Tips & Tricks for Mileage Tracking
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As self-employed individuals or business owners, you have the opportunity at hand to get reimbursed for qualifying business expenses. One of the biggest savings you’ll find comes from vehicle costs, such gas, depreciation, and repair and maintenance. For these reasons, each year the IRS permits eligible taxpayers to deduct vehicle expenses through the actual expense method or standard mileage deduction. What this means — if you regularly drive your car for work-related purposes, you have the option to write-off these costs on your tax return.
However, in order to take the mileage deduction, you must implement mileage tracking into your daily routine. Years ago this consisted of a notebook and pen along with the consistent reading of your odometer. But today, millions of taxpayers are taking advantage of mileage tracking apps that automatically log all business miles driven. If you’re unsure of how to get started or want to better understand what mileage tracking is, the following tips and tricks will help open the doors to your tax savings possibilities.
What is the easiest way to track mileage?
Downloading a mileage tracking app is by far the simplest method of tracking business miles nowadays. Not only that, it’s both time-saving and cost-effective. With MileIQ, you don’t have to remember to start or stop tracking after you’ve completed a drive. With the app’s innovative software, business owners and self-employed individuals can keep going about their day without stressing over accurate reporting. In addition, by the time tax season arrives, you’ll have all the information you need to take the mileage deduction.
Tip: Leave manual logging in the past. Human error and daily distractions can get in the way of logging, which is why mileage tracking apps are now used by millions of drivers worldwide. It’s simply your best security for steering clear of misreporting on your taxes.
Does the IRS require mileage tracking?
In short, no. But this doesn’t mean you won’t benefit from keeping track of mileage. Not only does it help you earn big savings on your tax return, it also gives you peace of mind and a clear indication of the wear-and-tear on your vehicle. Not to mention, the IRS runs every tax return through a number of processes to look for tax mistakes. If you end up getting caught for misreported mileage, the first thing they’ll request is adequate records to back your claim.
Tip: Don’t report mileage unless you have the records to prove it. Many people try to underestimate, or worse, overestimate mileage without proper documentation.
