If there is one thing small businesses and self-employed entrepreneurs hate the most, it’s definitely taxes. Even in case of possible tax deductions, there is a lot of work to be done preparing all the documents necessary.
Such is the case with mileage reimbursement – while the IRS does allow taxpayers to claim deductions for business trips, it requires them to properly log the mileage. How to do so properly?
What is a Mileage Log?
There’s a lot of paperwork involved in managing a vehicle fleet, and keeping a detailed mileage log is one of them. It sounds simple – after all, what’s so difficult about tracking how far your vehicles have driven?
Unfortunately, the reality isn’t so simple. In the United States, the IRS provides strict requirements even for a basic mileage log, including the need to record the date of the trip, business purpose, and locations, in addition to the mileage itself. Each trip using each vehicle your business owns must be properly recorded. This gets even more complicated if you’re using your private car for work – you need to log business miles, commuting miles, and private miles as well.
While some businesses simply estimate their mileage, this is much more dangerous than many company owners think – in case of an IRS audit, you might be at risk of getting fined, and that’s apart from paying back everything above what your recorded mileage should be.
How to Keep Track of your Mileage for Taxes
To avoid getting fined, you’ll need to properly log your mileage. In case of an audit, the IRS might want to access not only your logs, but also your business expense reports, odometer readings, videos from traffic cameras, credit card statements, and tolls.
Fortunately, there’s no need to worry – we’re living in the 21st century and there’s no need to keep your mileage logs by hand anymore. With the right mileage tracker app, you can automatically track all your vehicles. On top of this, applications like MileageWise help you create a fully IRS-compliant mileage log, with additional Retrospective Mileage Recovery functionality – don’t let a surprise IRS audit ruin your business, use an advanced online mileage tracker app.
Increase your Tax Deduction with a Mileage Tracker App
The mileage logging software of the above-mentioned MileageWise offers a built-in system for checking and correcting 70 logical conflicts in your mileage log, helping you avoid fines in case of an IRS audit. The app offers full support for electric and hybrid cars, as well as a dedicated expert support service to help you find the best solution to keeping your mileage log for IRS clean and accurate.
Many people feel that they’re not ready to pay the full price for an app for mileage they haven’t tried. MileageWise offers a 14-day full version trial period, giving you a free mileage tracker with all features available from the start. Using MileageWise, you can increase your tax deduction up to approximately $12,000 per tax year with minimum effort, saving not only your money but also your time. Additionally, your subscription is deductible as a business expense as well.
Forget about keeping a paper mileage logbook or an Excel spreadsheet that’s not IRS-compliant – switch to professional mileage tracking software.