If you use your car for work or have employees that use their vehicle for work, it’s essential to keep track of mileage so you can deduct the cost of business-related travel from your taxes. Even though the Internal Revenue Service (IRS) makes it reasonably easy to figure out your mileage rate and file that as a deduction, tracking mileage for work can feel like an arduous task for both employees and employers. This isn’t made easier by the wealth of options you have to track mileage, such as paper logs, digital spreadsheets, or applications. Knowing which method will work best for your business is difficult with such a wide selection of options.
In this article, we will explain some of the requirements for tracking work mileage and walk you through the different methods available to help you make an informed decision on which one is best for your needs.
IRS Requirements
The IRS has strict rules about what needs to be included in a mileage log, so it’s essential to choose a method that will meet their requirements. Besides being timely, it’s vital to be exact when keeping a mileage log because estimations and approximations will not suffice if the IRS wants to audit your taxes. How you log your mileage is up to you; however, the IRS has requirements for the information a mileage log must contain to be considered valid.
Every mileage log should include:
- Number of Miles Driven – While the IRS doesn’t require odometer readings, they do require an accurate record of the miles driven.
- Destination – This is needed to ensure that the miles recorded accurately reflect the miles driven to and from the destination.
- Date & Time – The IRS requires that miles are logged promptly and include the date and time of the trip.
- Business Purpose – Because the IRS will only allow you to deduct miles driven for business reasons, they require the business purpose to be included in the log.
Methods for Tracking Mileage for Work
There are many ways to track mileage, but not all of them are as equally effective, making choosing the right method difficult. Does it meet IRS requirements? Are miles tracked accurately? Are employees responsible for monitoring their own mileage? Is it efficient? Let’s look at some of the options available and see which one will work best for you.
Paper Logs
Paper logs are the most traditional way of tracking mileage and, until recently, were the primary method people used for tracking mileage for work. Paper logs are also easy to use, don’t require batteries or an internet connection, and only require paper and a pen. However, if you want the most accurate record possible, paper logs aren’t going to cut it. They are easily lost, people forget to write down the mileage, and they are more prone to human errors than something like an app. Additionally, if you fail to log your mileage, you will not be able to claim it as a deduction on your taxes.
However, some people like the old-fashioned approach because they feel it gives them greater control over their information. If you want to use paper logs, make sure that you create a backup system in case it is damaged, lost, or destroyed.
Spreadsheets
Because of their ease of use and customizability, spreadsheets are another popular tool for tracking mileage for work. Programs like Excel or Sheets can be great for monitoring mileage digitally. Allowing you to keep track of all the details of each trip you take for work—like where you went and how long it took—without worrying about losing your notes or forgetting anything important.
However, spreadsheets aren’t without their faults. One downside of tracking mileage for work with a spreadsheet is that it can be time-consuming to enter all data manually. This is especially true if you have a lot of trips or if you take multiple modes of transportation. Additionally, it can be easy to make mistakes when entering data into a spreadsheet, leading to inaccurate records. Another downside is that you may not have access to your spreadsheet when you’re on the go, making it challenging to track mileage in real time and opening up the possibility for errors.
Mileage Tracking Apps
When it comes to using an app for tracking mileage for work, the possibilities are endless with numerous apps on the market. In general, mileage tracking apps allow you to track and record the miles you drive for work on your phone; however, how the apps work will vary. For instance, while some apps may allow you to record the purpose of your trip and what business-related expenses were incurred during that trip, others only let you record mileage. How the app tracks miles will also vary from app to app, with some relying on the user to enter their mileage or to start and stop the app at the beginning and end of the journey, while others automatically calculate the miles based on the starting and ending location.
As with the applications themselves, the downsides of mileage tracking apps vary wildly depending on which option you choose. Some apps are designed specifically for tracking mileage; others are intended for other purposes like navigation and can be used to track mileage. However, these apps may not be as well-suited to tracking mileages as those made specifically for it. In addition, some apps may be better than others at collecting different kinds of data about your trip. For example, some might only allow you to record how many miles you drove each day or week, while others might allow you to enter specific trip details like where exactly you went and why.
Make Tracking Mileage for Work Easy With SureMileage
If you’re looking for the best way to keep track of your mileage for work, then you’re in the right place. SureMileage by CompanyMileage is the easiest way to track your mileage—and it’s just one part of our entire suite of tools that makes tracking and reporting more effortless than ever before.
SureMileage eliminates the tedious calculations of traditional mileage reimbursement methods by allowing employees to report their starting and ending points and calculating the most direct driving route between them. By doing this, we eliminate the need for employees to track odometer readings and ensure that you’re only reimbursing employees for the miles they drove for work.
For more information about how SureMileage can help you save time and money while boosting efficiency at work, request a demo today!