IRS Mileage Logging Questions Answered

Photo courtesy from Wikimedia Commons by Jacek Rużyczka

Logging mileage for tax purposes. One of life’s real pleasures… NOT.

But a necessary evil, nonetheless. And one that doesn’t have to be so tedious.

Yep, there’s an App for that.

Why Do You Need to Log Your Mileage?

Why? Because it’s one of the only ways to claim business expenses when using your vehicle for work.

First up, it’s essential to get a mileage logging app that’s reliable and efficient. By tracking your mileage for business correctly, you can make a huge saving on your tax expenditure.

A good mileage app can also help you avoid the Internal Revenue Service audits which can be hectic for you or your accounting team.

What Is Deductible Mileage?

The IRS aloows you to deduct all the mileage covered using your vehicle for business purposes. Mileage deduction mostly applies to 1099 workers, but W-2 employees may sometimes be eligible.

Examples of mileage covered for business purposes include:

  • driving to meet clients
  • picking up supplies
  • driving to offices other than your regular place of work, and
  • any other drive that is not for personal gain.

What Does the IRS Consider a Business Drive?

  • Errands/supplies – for example, visiting the post office, going to the bank, getting supplies from the local store, etc. Most business owners forget these little trips, but they can add up to a huge deduction at the end of the year.
  • Business meals and entertainment – If you drive to meet a vendor or a client, the IRS considers this a business drive. Examples include meeting a client over lunch, getting coffee with a vendor, entertaining your business colleagues, etc.
  • Airport/travel – When you travel to and from the airport for business reasons, the IRS considers this a work trip and hence it is an allowable deduction.
  • Odd jobs – If you drive to side jobs such as babysitting, lawn mowing, and pet care you can deduct the miles from your taxes.
  • Customer visitsDriving from your office to a client site to meet a customer or client qualifies for mileage deduction.
  • Temporary job sites – If you drive from home to any temporary job, you qualify to log the mileage for tax deduction purposes. The IRS considers any job that lasts less than one year as temporary.
  • Job seeking – If you are driving to and from home looking for a job in the same industry as your previous job, then you can deduct the mileage from your taxes.

What’s Required When I’m Tracking Mileage for Taxes?

When you use a mileage logging app; the IRS requires you to provide the following details:

  • Total mileage covered for business
  • The dates you made the business trip
  • The places you visited during a business trip
  • The purpose for which you travelled

It is important to remember that the IRS requires the total number of miles that you drove for business during the year as well as personal driving.

The IRS is usually satisfied with contemporaneous records. Always ensure you have enough records to prove your case for deducting business miles.

Use a reliable mileage app to provide the IRS with the records it requires. An app that automatically tracks, logs, and calculates your mileage for every trip that you do for both personal and business purposes.

Can I Claim Mileage On My Tax Return?

As long as you’re a self-employed worker, you can deduct your mileage on your taxes.

If however, you’re a W-2 worker, you can only deduct your mileage if your total itemized deduction is more than 2% of your adjusted gross income.

How to Track Mileage for Taxes?

The best way to track mileage for tax purposes is to use a mileage app. You need to record your drives using what people call a mileage log or a mileage log book.

Regardless of the name you gave it, the IRS will require documentation to prove the case for the deductions that you are trying to make.

What’s The Difference between a Gasoline Log vs. Log for Mileage?

Photo courtesy from Flickr Images by Chuck Coker

Don’t get confused by the two terms. A gasoline log is used to track the amount of gas you use in your car. A mileage log, however, is what you record as a business and personal mileage for tax purposes.

How to Keep Track of Gas Mileage for Taxes

If you’re using the actual expense method to calculate your taxes, you can deduct the exact cost of gasoline. The actual expense method is tricky because you need to diligently track all the expenses that you incur on behalf of the business.

What Does The IRS Accept for Mileage Logs?

The IRS will accept different documentation for proof of mileage. Among the names that the IRS will use in their documentation are: mileage log book, mileage log, mileage sheets, and mileage books.

Regardless of how you choose to name your documentation for mileage, the IRS can also accept digital versions. Make sure your digital documentation features all the details that are needed by the IRS.

Since digital mileage is easier to store for up to five years, it’s worth the little effort to maintain one.

A physical mileage log is easily damaged or lost. This may cause you trouble with the tax authorities in the future.

The smart option is to get an affordable mileage tracker and logbook app that fully automates your work-related car expenses, giving you a complete record of mileage at tax time. And it’s even tax-deductible.

Check Car Buy Now