Mileage tracking goes a long way toward controlling your business expenses, maximizing tax deductions, and complying with IRS requirements. If you want to take advantage of mileage deductions, you need solid evidence to prove it.
It has to be accurate, meaning guesstimating is out of the question.
So, do you know how to track mileage for work efficiently and accurately? This article discusses the topic in detail and answers all your questions.
Before discussing the best way to track mileage for work, we’ll go over the most critical points. There are two methods you can use for this purpose:
It’s easy to conclude that the mobile app method is much easier and more accurate, but we’ll explain why that is a bit later.
Besides choosing one of these two methods, you also have to decide about the options for deducting driving expenses for work. You can pick between:
Regarding this decision, it’s best to crunch the numbers and see which options will give you a more significant tax break.
The best way to track mileage for work is by choosing an accurate and reliable tool, such as the mileage tracker app Timeero.
Let’s briefly explain why.
Statistics say that expense reimbursements are among the top three most common occupational fraud schemes in the United States and Canada. These cases result in a median loss of $120,000.
Companies that heavily rely on a mobile workforce and use vehicles to travel between worksites are at risk of losing money on incorrect or inflated expenses. They must know how to track mileage for work reliably and accurately, with safeguards in place to protect both the company’s and the employee’s interests.
Another reason you should have the best way to track mileage for work figured out is to get your tax returns right for tax purposes. Tax deductions on expenses can be substantial. However, the IRS can slap a hefty fine if your mileage claims aren’t properly corroborated.
When tracking mileage for work purposes, choosing the right software is crucial to ensure accuracy, compliance, and efficiency.
In this regard, Timeero stands out as a comprehensive solution designed to simplify mileage tracking and improve your business operations.
And don’t just trust our word for it. We’ve tested and compared the best mobile mileage tracking apps today, such as Everlance, MileIQ, or TripLog, and we can safely say - Timeero tops them all.
Let’s delve into the key features and benefits of Timeero’s mileage-tracking software.
Timeero’s mileage tracking is at the core of its functionality. This software offers an effortless and precise way to track business mileage.
The app automatically starts tracking mileage when employees begin driving during work hours. The app recognizes driving speed, ensuring that no mileage is left unrecorded.
This real-time tracking feature saves time and guarantees accuracy, eliminating the need for error-prone paper logs or spreadsheets. Besides real-time tracking of employees on the field, Timeero lets you view and replay their routes, with details such as locations with timestamps and driver’s speed.
Timeero’s Segmented Tracking feature provides invaluable insight into how your employees spend their working hours. It breaks down the day into easily understandable segments, including business travels, with details such as travel duration, mileage, and time spent on specific jobs or sites.
The most important thing about segmented tracking is that you get these kinds of reports without effort from your employees. The approach is entirely hassle-free - they have to clock in and out JUST once during their workday.
This level of detail provided by the Segmented tracking enhances your ability to analyze and manage your workforce’s activities, making it a powerful tool for optimizing efficiency.
Timeero goes the extra mile to help employees choose the most efficient routes. When job destinations are assigned, the software suggests the shortest route to employees, helping them save time and fuel costs.
This feature enhances productivity and contributes to cost savings, making it an essential asset for businesses with a mobile workforce.
Timeero’s Suggested Routes feature further boosts accountability and efficiency. Employees can compare the suggested route with the actual route they took.
This encourages employees to follow optimal routes and provides transparency regarding deviations. It’s a valuable tool for promoting responsible driving and efficient time management.
In addition to its comprehensive mileage tracking capabilities, Timeero offers a unique and practical feature known as “Commuter Mileage.” This feature is designed to simplify the mileage classification.
Here’s how it works: When you assign job destinations to your employees, Timeero considers their commute distances. The software automatically begins tracking business mileage once an employee’s commute threshold is reached. This ensures that the mileage recorded is exclusively related to work-related travel.
Timeero excels in helping businesses meet compliance requirements, especially regarding mileage tracking and expense reporting. The software generates accurate and IRS-compliant mileage logs that contain all the necessary data.
Additionally, any corrections made to entries are meticulously recorded in the History Log, ensuring transparency and auditability. Such an approach to reporting and compliance simplifies the often complex task of managing mileage expenses.
There are many benefits to opting for Timeero to keep track of mileage instead of tracking it manually. We’ve gathered a few.
With a mileage tracker, you and your employees won’t have to worry about missing a date or piece of information in the timesheet when the tax time comes.
This automatic mileage tracking tool will capture all the trip details in an IRS-compliant manner and store them safely. In other words, you use these mileage records internally to calculate employee expense reimbursement and externally in case of an audit.
Timeero provides a couple of extra added twists to your regular mileage tracker. Besides capturing the total mileage, it allows you to check your employees’ location at any time, the speed at which they travel, and even replay the route they have taken.
GPS tracking technology allows tracking your employees’ movements precisely and in real-time. The breadcrumb trail functionality lets you track every route your employees take retroactively.
So, there will be no under-the-radar detours to increase your reimbursement costs. Timestamps add to the credibility, which is why the IRS will not object to your mileage records.
In short, your employees won’t have to make approximate or rough estimates or think about mileage expense tracking. Timeero even uses geofencing to notify your employees to start tracking mileage when they leave a predefined perimeter and alerts you if they don’t do that.
With no paperwork and administrative tasks, your employees will be free to focus on their jobs.
Moreover, automation will have a positive impact on their accountability. At the same time, you’ll be able to monitor every team member’s performance via detailed mileage reporting functionality.
All these factors will result in boosting the productivity of all your employees. This includes the administrative department, which won’t waste time double-checking an avalanche of trip details and trying to identify potential incongruencies.
To eliminate time-consuming, repetitive tasks, Timeero lets you automate reimbursement calculations.
By integrating with bookkeeping payroll and invoicing platforms such as QuickBooks, Gusto ADP, Xero, Paychex, or Paylocity, you can eliminate paperwork, eliminate human error, and calculate payroll calculations in a snap.
Integrating Zapier will make your life tremendously easier since it allows you to streamline your workflows by connecting your existing apps and transferring information between them seamlessly and effortlessly.
To learn more about how to track mileage for work quickly and easily using an app, check out our Complete Mileage Tracker Guide.
Employees will worry whether using a GPS mileage tracker can invade their privacy, especially when they’re off the clock.
Timeero, for example, captures and stores locations only when an employee is clocked in. In addition to that, the system will notify them when their location is being tracked. A blue flashing icon will appear on iOS and a notification on Android to make the entire process transparent. Once they clock out, the tracking stops.
This is an old-school system, as it involves logging business miles using pen and paper or Excel spreadsheets.
So, your employees must track miles and manually enter all the details after every trip.
If you plan on claiming tax returns, you should know that the IRS can request an audit anytime.
Therefore, your expense documentation has to be compliant and regularly updated.
To make it easier for your employees to enter data, create a mileage-reimbursement template log with columns for bits of information the IRS requires, which are:
This method can be particularly complex and inefficient for employees visiting several worksites within their shift, such as home care or construction workers.
Moreover, this method doesn’t allow you to check whether they take longer routes, pad mileage, or run personal errands during business trips. Given that they have to fill out the spreadsheet between their jobs, they will likely get distracted and forget to do so.
Now that we’re clear on the best way to track mileage at work, we can discuss another vital issue: maximizing your mileage deduction.
To lower your taxes and get some of the money you give to the IRS back, keep accurate and timely records of your and your employees’ business driving.
Only business miles are deductible, which can be problematic if the vehicle is used for personal and work purposes. The only way out of this is to keep separate records, and using a mileage tracker can make this significantly easier.
However, we need to distinguish what qualifies as business driving so that you can be sure that the IRS will accept your claim.
The IRS allows tax returns only on the miles driven to grow your business. The Agency also doesn’t consider commuting to and from work a business expense.
So, if you choose to reimburse your employees for the number of miles they drive to get to work and travel back home, bear in mind that you won’t be able to request a tax refund on those expenses.
According to the IRS, deductible business miles can be some of the following:
So, dropping to the nearby Starbucks to grab a cup of joe doesn’t constitute a business expense.
Business miles should be logged appropriately and distinguished from personal driving.
It’s worth mentioning that employees can no longer claim mileage deductions. Still, you can continue to reimburse them for business use of their vehicles.
To decide how to track mileage for work, you should also understand that there are two methods for claiming a tax write-off on your business mileage - the standard mileage rate or the actual expense method.
Choosing one of them before you start tracking mileage for work is essential because the method decides what kind of calculation you will use, how your records will look, and what evidence you need to collect.
The IRS establishes the so-called standard mileage rate or the amount you can deduct from every business mile driven every year.
The standard mileage rate for 2024 is 67 cents per business-related mile.
You can reimburse your employees more, but you can claim only up to 67 cents per mile.
This method is pretty straightforward - you multiply the number of business miles by 67 cents, and that’s the amount of your tax write-off.
If you opt for the standard mileage rate method, you need to substantiate your claims by providing the exact date, mileage, and business purpose, and that’s why an app like Timeero is the best way to track mileage for work.
To read more about the additional requirements and details for implementing this method, check out our Guide to Employee Mileage Reimbursement.
The actual expense method refers to keeping records of all the related expenses incurred while using a car for business purposes.
In other words, these expenses include:
To prove all these vehicle expenses, you need receipts.
If the car is used for personal and business purposes, you must calculate the percentage of business miles and multiply it by the expenses.
So, if an employee drove 20,000 miles and 10,000 miles are business-related, you can write off 50% of all car expenses.
So, how do you track mileage for work if you’re using the actual expense method?
Contrary to common belief, you do need to stick to tracking mileage for work even if you’re using the actual expense method. That’s the only way to separate business and personal miles and provide the evidence to the IRS.
Best mileage tracking apps can help you calculate all this automatically and save you from crunching numbers and doing tons of paperwork.
Staying on top of all your business mileage logs is a lot of work. Still, it’s necessary to cut your expenses and hold your employees accountable. No matter which one of the methods for calculating business miles, you should implement a GPS mileage tracker.
Timeero’s mileage tracking software offers a comprehensive solution covering every aspect of mileage tracking and reporting, ensuring efficiency and compliance, at an affordable pricing.
The software’s mileage-tracking features and robust reporting tools make it an invaluable asset for businesses seeking to streamline operations, improve accountability, and stay compliant with mileage regulations.
Whether you’re looking to optimize routes, track employee mileage and business-related activities, or generate accurate reports, Timeero has you covered.
To explore Timeero further, you can read our comprehensive Timeero review.
The easiest way to track your mileage for work is by using a reliable mileage-tracking app, such as Timeero. You can also use a traditional method that relies on odometer readings and paper logs or spreadsheets, which is error-prone.
Using the Timeero mobile app, you can track work mileage daily easily, with a simple clock in and out. The app will recognize when you’re driving while on the clock and keep track of total
miles.
The best mileage tracking apps track your business-related mileage and routes efficiently and accurately. You can use these logs to claim mileage reimbursement, and the software can generate IRS-compliant records automatically.
Natasa is a writer specializing in the IT and software industry with 6+ years of experience in content writing and online marketing. During that period, she wrote more than 1,000 articles and several ebooks. She majored in English language and literature and loves cats, sneakers, and candy. When she's not working, she's probably binge-watching Netflix.
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