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Creating a Mileage Log for Taxes

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If you use your vehicle for business purposes, you may qualify for tax deductions through the IRS. Several aspects of the process become important if you want to maximize these deductions, such as odometer reading and a logging of all your trips, whether for personal use or business use. Today we’re going to take a look at what exactly it is you need to know to do this comprehensively and correctly.

What Kind of IRS Mileage Log Requirements Are There?

There are a few major requirements that are needed to get things right:

1) Recording your odometer readings: technically you only need to do this at both the beginning and the end of the tax year, but in the event that you are facing an IRS audit, logging your mileage monthly or even between every instance of refueling is of the utmost importance. This is because if you get to the end of the financial year and there are any anomalies, discrepancies, or differences between your recorded trips, you’re going to need to narrow down which trips you may have missed.

2) Determining your method of calculation: For mileage logging, the IRS considers two categories – the standard mileage rate and the actual expenses method. Let’s break them down in simple terms with a few examples:

  • Standard mileage deduction for 2022 considers 58.5 cents on every dollar you spend as tax-deductible, meaning that if you drive 10,000 business miles during the 2022 tax year, you will be eligible for $5,850 in rebates.
  • The actual expenses method is focused on all of your vehicle-related expenses – this includes things such as oil, gasoline, automotive repairs, vehicle rentals, tolls, parking fees, and even depreciation. Receipts of all these things will need to be kept in order for the person involved to prove their purchases, and those receipts need to be itemized with specific dollar amounts.

Note that if you start using the actual expense method for your car, you can’t change it to the standard mileage rate as long as you use that car for business.

3) Maintenance and submission of a mileage log: For most small business owners, entrepreneurs, and independent contractors the standard mileage rate is the most common. If that’s you, you need to be able to submit a comprehensive log that differentiates between trips as personal or business-related, and there are a few things to bear in mind: firstly – commuting between your residence and place of work is considered a personal trip. Conversely, traveling from work to a client, running errands, or even attending a business lunch are all considered tax-deductible business trips. Finally, logs must be printed, legible and contain all of the aforementioned details.

With all of this in mind, what becomes clear is that in order to stay above board when creating mileage logs, a lot of things need to be accounted for. You need the most efficient and comprehensive methods that maximize your returns. Read on as we delve into the best method to do just that – and, the best mileage tracker app.

What’s The Best Way To Track My Mileage?

If you’ve been doing things the old school way, don’t fret. It’s staggering just how many people use an Excel mileage log template – or indeed how many people still google ‘mileage log template google sheets.’ The reality, however, is that there’s a better way: an app complete with a web dashboard that functions not just as an expense tracker; but as a specialized mileage tracker app. This app can be downloaded on Android phones and Apple devices alike, while its counterpart – the web dashboard – can be used to fine-tune and finalize your mileage logs on your PC.

Here’s the good news: we’ve done the research and we’ve found the best mileage tracker app – it’s a promising newcomer to the market called MileageWise.

But Why is MilleageWise the Best Mileage Tracker App?

Two reasons: features and huge average tax deductibles. MileageWise users enjoy an average business mileage deduction of $12,000 – almost double that of their closest competitor. It’s the features themselves that make this kind of deduction possible, so let’s take a look at the veritable smorgasbord they have on offer:

Manual trip recording along with three auto-tracking methods: MileageWise offers Plug’N’Go auto-tracking, Bluetooth auto-tracking, and vehicle movement monitoring, all of which mean that once you’ve entered in your clients or typical business destinations, all you need to do is choose the method that’s most intuitive for you.

On top of all this, you don’t need to worry about automation taking over – manual trip recording is possible from both the app itself and the web dashboard that can be used on your PC.

AI-based AdWise technology: Accessible from the web dashboard, AdWise checks and corrects up to 70 different logical conflicts in your mileage log, which is absolutely paramount if you unexpectedly get hit by an IRS audit. This feature is why the company calls itself IRS-proof – you will not even be allowed to print your mileage log for the IRS until AdWise has corrected the problems which would normally cause you to get fined after you submit your logs. Examples of potential problems include discrepancies between your odometer readings at various points, or logged trips which make other mileage that has been recorded impossible.

Retrospective Mileage Logs: If there are big gaps in your current logs, MileageWise can help you reconstruct your vehicle mileage log so that everything is above board. Collect all the past information, receipts, client locations, and the miles you were doing during that time, which can then be used to reconstruct an accurate log, which makes sense in the context of both your odometer and your business destinations.

Mileage Log Preparation Service: If you’re a busy entrepreneur or small business owner, you may simply not have the time to complete an IRS-ready mileage log for taxes. You might not like messing around with apps or technology in general. Luckily, you can outsource the task to the experts at MileageWise who will, with your assistance, be able to construct a printable mileage log in no time. As anyone in business will tell you – time is money – focusing on your business and letting the experts take care of the admin is almost always a win-win scenario.

Now You’re Set!

Just download the app and its web dashboard companion – you can try the full version of MileageWise free for 14 days. Then you can see for yourself why the software’s users get so much out of their tax deductibles – and if you don’t like it you can simply walk away.

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Source: Plato Data Intelligence: PlatoData.io

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