It’s no secret that tracking your business mileage can save you money come tax season. Whether you’re a small business owner or a salesman, a freelancer or an online shop owner, you are leaving money on the table every time you use your car for work and don’t track your mileage.
The benefits of tracking your miles
All business miles are deductible on your tax return. Any time you drive for business purposes, you can use that trip to your advantage by claiming the mileage deduction. Whether you drive for a ride-sharing company, such as Uber or Lyft, work in field sales, regularly meet clients or provide in-home services, tracking your mileage creates tax savings.
There are two different ways to claim the deduction. The first hinges on one thing: the IRS Standard Mileage Rate. In an effort to simplify the deduction for business owners, the IRS lets you use a flat rate to calculate the value of your deduction. The rate varies from year to year, but in 2018 the standard mileage rate is $0.545. That means for every thousand miles you drive, you can deduct $545 from your taxes! Note that driving to and from work doesn’t count.
The second option is to deduct the actual expenses related to your vehicle. That includes things like lease payments, fuel costs, and insurance. You can deduct the portion of those expenses that apply to your business miles. By tracking your mileage, you can quickly determine which method is more advantageous to your situation. Take your record of miles driven and multiply that by the standard mileage rate. If that number ends up being higher than the cost of your actual expenses, it’s better to claim the standard mileage deduction.
With the variety of highly intuitive, easy-to-use mileage tracking apps available today, there is little reason not to log your mileage. The days of logging miles on anything from notebooks to receipts to fast food napkins are over. A new generation of software is available to you that allows you to keep detailed, organized records directly from your phone.
Mileage tracking apps remove the guesswork
Using a mileage tracking app makes it easy to record your business mileage accurately, every time. No more guessing or losing your notes, no more estimates or forgotten expenses, no more uncertainty.
All your data is right there on your phone for you to review, revise, and edit at any time. A good mileage tracking app produces IRS-compliant reports so you don’t have to worry about having incomplete or incorrect data. It’s important to choose an app that is IRS-compliant.
Most apps available automatically track your mileage and allow you to classify a trip for business or personal reasons. You can also add things like tolls and parking costs along the way so that you can keep track of your expenses down to the last detail.
Simply put, mileage tracking apps make it easy to keep meticulous, detailed records with virtually no effort.
A mileage tracking app can ease your mind
Good mileage tracking apps take a lot off your plate, freeing your mind to focus on more important things. For example, people in the sales and service industries can spend more time helping customers understand their products instead of manually logging miles.
Since mileage tracking through an app is automated, you don’t have to spend extra effort calculating your miles traveled or remembering to stop and take down your mileage when you are in a hurry.
Or worse, putting it off until the day before taxes are due and guessing!
When you turn on an efficient mileage tracking app and drive, it runs silently in the background, allowing you to keep your eyes and mind on the road. By focusing less on the mundane details of recording your mileage, you are free to look at the big picture and do what’s best for your business. An app can ease some of the stress of day-to-day reporting so that you can use your mental energy for the things that need it.
A mileage tracking app can increase productivity
When your mind is less occupied by reporting and administrative tasks, you are free to get more done for your business. Imagine what you could do if you were less bogged down by administrative tasks.
If you’re a real estate agent you can be showing houses, running around meeting clients and buying gifts. It’s cumbersome to have to write down each trip every time you take one.
While mileage tracking may not seem like a particularly big drain on your time, it all adds up. According to a 2017 report, manual mileage logging adds an average of 21 administrative hours annually per employee.
That’s 21 hours you could spend doing things that matter more for your business. If your business happens to be a large company, that time-savings grows exponentially. Imagine how much 2,100 or 21,000 more hours could do for your company’s productivity!
A mileage tracking app can help you “work smarter, not harder,” adding valuable time to your day and freeing your mind to focus on your work rather than the administrative minutiae.
Choosing the right mileage tracking app for you
There is a multitude of different options to choose from when seeking a mileage-tracking app. You can find anything from free options that limit your number of trips per month to paid services that track every mile, every time, and allow you to classify your trips accordingly.
Everlance is an intuitive, user-friendly app that allows quick and easy tracking of miles. While there is a free version that allows 30 trips per month, most users benefit from the Premium version.
Our app allows you to easily classify trips as business-related or personal use. It enables you to add tolls and parking expenses as needed. Plus the app offers expense and revenue tracking capabilities so you can keep the most detailed records possible.
Everlance also offers a dedicated team-based business mileage tracker product, allowing you to integrate data across multiple team members. These services make Everlance a good option for both larger operations and freelancers.
Getting started with mileage tracking
In addition to Everlance, there are also a few other mileage tracking apps we recommend to those looking for more options.
Many apps offer mileage tracking, but no matter which app you choose, using one is always the best option. Mileage tracking apps ensure you keep accurate, detailed, IRS-compliant records at your fingertips and help you put money back in your pocket through the business mileage tax deduction.
Don’t wait any longer! Check out your options, and start tracking your mileage!
Source : TaxAct Blog