Get Your Mileage Tax Deduction
If your small business regularly hits the road, the mileage tax deduction can be a big tax write-off.
The 2017 Internal Revenue Service (IRS) mileage rate is 53.5 cents per mile for business travel. So if you drive 120 miles a week (that's 6,240 miles a year), you could take $3,338.40 off your taxable income.
But tracking business mileage can be a headache. Here are three tips for doing it accurately and easily.
1. Understand What Records the IRS Requires
To claim your mileage tax deduction, the IRS requires that you maintain a detailed mileage log, including:
- Date of the business trip
- Start and end locations
- Business purpose of the trip
- Miles traveled
- Miles driven for business, commuting and personal driving during the year
Track correctly with "contemporaneous" records, which you create each time you drive for your business.
2. Use a Mobile App
For accurate and painless reporting, invest in a mobile app like MileIQ, Stride Drive or Hurdlr. These apps work in the background as you drive. Benefits include:
- Automatically tracking, logging and calculating your mileage for each trip
- Categorizing each trip as business or personal
- Offering feature-rich dashboard reporting
3. Sync With Your Accounting Software
Use an app that connects with your accounting software. Xero, Freshbooks and QuickBooks all sync with mileage tracker apps to automatically import mileage, capture it in your reports and categorize it appropriately.
These savings are well worth the work they require, especially considering how simple it's become to track your mileage.