Self Employed
The Ultimate Mileage Tracker Guide
What is a mileage tracker?
A mileage tracker is a tool, such as a device or an app, that helps you log mileage driven for business purposes. It can be used by individuals tracking their own work mileage for reimbursement or for tax deduction purposes (if they’re self-employed). Mileage trackers can also be used by companies who reimburse drivers to manage submitted drives and create reports.
While you may still see a pen and paper mileage log in the wild, most people have switched to tracking miles on their phone via an app like MileIQ. Since people carry around their phone anyway, it’s a much easier and convenient way to note down miles, especially if the mileage tracker is doing the work for you — that is tracking miles automatically.
This article will walk you through the whys and how's of mileage tracking and explain the difference between different types of mileage tracking tools.
How to track mileage for taxes
If you work as a contractor (sole proprietor or an LLC), you can write off miles you drive for your business on your taxes. This includes people who participate in the gig economy with ride-sharing and delivery services, like Uber and Doordash!
To make sure you saving the maximum amount on your taxes, you need to learn how to track mileage for taxes accurately:
- Record your starting odometer reading at the beginning of every year.
- Track and record every drive you take for business purposes noting down:some text
- Addresses
- Dates
- Total mileage
- Purpose of each trip
- If you’re using the same vehicle for work and personal trips, make sure you’re differentiating between them. You can’t claim mileage deductions on commutes (like travel from home to an office you work from regularly).
In case keeping an eye on all this data feels intimidating, good news. Using a mileage tracker like MileIQ can do the lion's share of the work for you — it tracks drives automatically, can auto-classify trips as business or personal based on your work schedule, and creates sharable reports you can send to your accountant. No need to enter drives into a spreadsheet!
How to track mileage for reimbursement
If you drive for an employer or hire drivers for your business, tracking mileage accurately is just as important. For drivers, tracking every drive means more money in their pocket, for employers, it means compensating drivers fairly without overpaying or getting in trouble with tax compliance (like reimbursing a commute). In some states, employers are required to compensate employees for out-of-pocket expenses, so dealing with mileage is unavoidable.
Drivers need to follow the same best practices as contractors — recording odometer readings, noting down all the drive details, and making sure personal trips don’t slip into expense reports.
Thus, mileage trackers are equally helpful: auto mileage trackers like MileIQ are especially great for busy employees who need to focus on serving the customer and may be pressed for time. Because drives are tracked automatically, they don’t need to pause work to update a log, and there’s no need to create or fill out forms — the app generates mileage reports for them.
Auto mileage trackers are also great for managers, since they get to review all mileage reports in the same place, in the same format, and can even deduct commute distances automatically for compliance.
Tracking Mileage: Manual vs. automated
People can and still do track mileage the old-fashioned way, with pen and paper. Or more often, the slightly less old-fashioned, but not much less time consuming way — with spreadsheets or a notes app.
That may work if you don’t drive for your job every day. But many people find themselves with missing drives, and thus missing out on savings at the end of the year. Sadly, they may not even know how much they could’ve saved since these drives simply never got tracked!
Mileage tracker pros and cons
Pros
Cons
Pen and paper
- Simple and familiar
- Low cost
- No special tools required
- Easy to forget and hard to maintain
- Easily destroyed
- Prone to inaccuracies
- Hard to read and verify
- Time consuming
Spreadsheet or notes app
- Relatively simple
- Low cost
- More durable and secure than paper records
- Easy to forget and hard to maintain
- Prone to inaccuracies
- Time consuming
- Boring and paperwork-y
- May requires internet access for updating
Automatic mileage tracker
- Tracks mileage automatically
- Convenient (most people carry their smart phones)
- Very little maintenance required
- Much more accurate
- Works without internet connection
- Saves drivers time on paperwork
- Would not work for drivers without smart phones
- Drivers need to create an account online and log in to an app
While the pen and paper method may feel tried and true to some, it’s easy to see that it simply doesn’t scale well for drivers logging more than a few drives per week. A mileage tracker app on the other hand, saves frequent drivers hours each week, turning tedious paperwork into a matter of a few taps on a screen.
Auto mileage tracker: Why MileIQ stands out
MileIQ is one of the first and most loved mileage tracker apps — we designed our app with drivers in mind, which means it’s easy to use, tracks drives seamlessly, and lets you report mileage without hassle. We wanted it to be a no-spreadsheet, no fuss mileage tracker for busy people who like to keep their paperwork light and simple.
People who track their mileage with MileIQ get:
- Automatic mileage tracking: There’s no start or stop button, the app tracks drives on its own, even in low service areas.
- Drive classification with a swipe: Swipe right for business or left for personal to classify a drive and make sure it goes into a report.
- Reports you can create and generate with a tap: All the information (locations, dates, total mileage, and value are there for you), just tap “send.”
- Easy tax compliance: Our annual mileage reports are designed to help self-employed people fill out Schedule C and A of their tax return.
You can track 40 drives each month for free with MileIQ or get the most value with our Unlimited plan.
