If you are going to be claiming a deduction for mileage and business travel expenses on your taxes, you will need to present documentation in order to verify your claim. Most people don’t bother providing this documentation, meaning that if they are randomly selected for an audit, they could be in quite a pinch. It’s not very often that documentation is checked, but in the case that it does happen, it’s better to be safe than sorry.
If you decide to abide by the law, you might as well make sure you’re tracking your business miles accurately. The IRS will review these deductions and they will know if you’ve been rounding numbers up. You will want to accurately log this information for easy reference.
If you are deciding to follow through with tracking your mileage and travel expenses for tax deductions, here are some things you will want to keep in mind:
Mileage is easy to estimate. However, it can be rather difficult to actually measure and record, particularly if you’re doing it manually. There are so many details to track, which is why people often end up just estimating their numbers. However, it’s important for you to keep a thorough and accurate log of miles traveled for work.
Otherwise, your deduction may be rejected. Do note that you cannot claim business mileage for your daily commute. You can only claim business mileage that is used for trips between offices, from the office to clients, and from home to clients. The same applies to vehicle service charges. If you are using company transport for a trip, you should be noting any expenses down and adding it to the record. Timeero provides an easy to use GPS Mileage tracking app for this purpose.
To calculate your mileage on business trips, you will want to note the odometer reading at the beginning of the calendar year, then again at the end. You will also need to document and record the date of each trip, the starting address, the destination address, the mileage of the vehicle at the beginning and at the end of the trip, the parking fees, the highway tolls, and any other trip-related costs in order to qualify for a tax reduction for business mileage.
If you have misplaced receipts or forgotten to record any business related trips, there are many other ways you can try and get evidence to try to come up with an estimate. If your company utilizes Uber, Lyft, or any other rideshare applications, there will be a record on the app of the times, dates, and other information. If only the location is noted, you can always write just the locations into Google Maps in order to get the mileage.
You can use this to calculate the mileage this way. If you have a calendar where you noted all your meetings, this can help jog your memory in order to try to look at receipts from gas stations. If you took the car for repairs, the repair shop will have noted the odometer reading for you. If you have misplaced that receipt then you can also give them a call and ask if they have any record of it. With these estimates, you may be able to get a range or approximate number for what your actual deductible mileage is.
Timeero provides modern, affordable mileage tracking software for enterprises. Get in touch today to see how we can help your business save thousands!