The Standard Mileage Deduction: What You Need to Know

Here’s what I know about you: You’re a smart business owner and you want to take advantage of every tax deduction available to you.

And as a smart business owner, you are no longer going to forget about mileage.

Here’s everything you need to know about when, how and what you need to track to make sure the IRS accepts your deduction.

The IRS is specific about when you can and when you can’t deduction mileage.

You can’t deduct your mileage from home to your primary work location.

However, you can deduct if you travel to a second location, or travel to a conference, business event, business lunch or dinner, to visit customers or run business errands.

So your daily commute is excluded but mileage for extra business-related trips can be deducted.

The IRS is particular about what you document to claim the mileage deduction. Make sure you’re logging the following items:

Ahh tracking, helpful in all areas of life (diet, time, etc), but 100% required by the IRS.

The IRS requires you to keep track of your mileage as you incur it, basically meaning that you can’t sit down on April 14th and figure out when you went where.

Therefore, you’ve got to track as you go.

Of course, you can use paper, a spreadsheet or any other method of manual tracking.

Just make sure you’re tracking everything above and that you don’t lose your log. You’ve got to hold on to it for several years after you’ve filed your taxes.

You can check out the IRS’s version of a log on page 27 of this document 

If you want to automate your tracking check into an app like MileIQ or the mileage tracking app that comes with QuickBooks Self Employed. 

These automatic trackers use GPS to track your drives in real time, all you have to do is classify it as business or personal and add the details.

There you go, tax savings in the bag!

I’d love to hear your tips and tricks for tracking your mileage, what’s worked for you? Share in the comments.