August 21, 2018
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.
Related Posts
When it comes to running a successful business, few things are as crucial as cash flow. You might have heard the term before, but what exactly is cash flow, and why should you, as a business owner, care about it? Let’s dive into the basics of cash flow and explore why it’s vital for your
Read MoreBookkeeping software has lots of tools to simplify bookkeeping. Today’s tool is Bank Rules, watch as I walk you through bank rules in Xero and QBO.
Read MoreEvery year you promise yourself that this will be the year that you keep up with your bookkeeping. And like so many other resolutions you haven’t done it. But this isn’t just some failed diet and exercise program, this is your business! And the books can’t not get done.
Read More“I’m a complete disaster”
“I’m so sorry my books are in this state”
“This must be the worst you’ve ever seen”
So many of my bookkeeping consults start out with some version of these statements. I hear it almost every time. But I have yet to find someone’s bookkeeping in such a state of disarray that it can’t be sorted out. And before you say “but you haven’t seen MINE” I can assure you that I’ve seen something like it and it’s never as bad as you think.