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, which means that 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, let’s take a look at the most important details you will need to address.
The first choice you will need to make when you begin tracking mileage for work is how you will go about tracking mileage. Keep in mind, the IRS requires specific details to be included in mileage records, so choose the option that will help you keep the most accurate and detailed logs.
There are two ways you can track mileage:
Besides choosing one of these two tracking methods, you will also need to decide how you will deduct driving expenses for work.
There are two deduction options to choose from:
When choosing which deduction method is right for your business, it's best to crunch numbers to see which of these two options will give you a more significant tax break.
We believe the best way to track mileage for work is to choose an accurate and reliable tracking tool like Timeero, a GPS powered mileage tracking app.
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 with a mobile workforce whose employees use personal vehicles to travel between worksites are at risk of losing money due to inaccurate and overexaggerated mileage records. By using a reliable mileage tracking tool and implementing company policies, businesses can reduce the likelihood of false reporting that impacts their bottom line.
Additionally, determining the best way to track mileage for your business will help you produce verifiable records for tax purposes. Tax deductions on business expenses can be substantial, but the IRS can issue a hefty fine if your mileage claims aren't properly documented.
When it comes to tracking mileage for work purposes, choosing the right software is crucial to ensure accuracy, compliance, and efficiency.
Timeero stands out as a comprehensive solution designed to simplify mileage tracking and improve your business operations.
And don’t just take our word for it. We’ve tested and compared the best mobile mileage tracking apps on the market today, such as Everlance, MileIQ, and TripLog, and we can safely say - Timeero tops them all.
Let's take a look at the key features and benefits of Timeero's mileage-tracking software.
Timeero's mileage tracking software offers an effortless and precise way to track business mileage.
Once an employee clocks in for work, the app records their originating GPS location and automatically starts tracking mileage once the predefined speed threshold is met.
Timeero’s real-time GPS tracking guarantees accuracy, eliminating the need for error-prone paper logs and spreadsheets. Besides providing employee locations in real-time, Timeero lets you view and replay employee driving routes. The route replay feature displays location details with timestamps and driving speed.
Timeero’s Segmented Tracking feature provides invaluable insight into how your employees spend their working hours. It breaks down the day’s travel into individual segments. Each segment is identified on the map with a red dot and can be opened to view details such as travel duration, mileage, and time spent at 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.
Segmented tracking provides detailed reports without requiring any effort from your employees. Workers only need to clock in once at the start of their work day and Timeero handles the tracking and segmentation of business trips. The approach is entirely hassle-free and encourages employee accountability in the workplace.
This level of detail provided by segmented tracking enhances your ability to analyze and manage your team’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 Route feature further boosts accountability and efficiency. Employees can compare the suggested route with the actual route taken.
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 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 in terms of mileage tracking and expense reporting. The software generates accurate and compliant mileage logs that contain the travel details required by the IRS.
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 associated with using Timeero to keep track of mileage. Let's take a look at some of the app’s most notable features.
With a trusted mileage tracking tool, like Timeero there is no need to worry about accidentally omitting a date or piece of information on timesheets when tax time comes.
Timeero is an automatic mileage tracking tool that captures trip details in an IRS-compliant manner and stores them safely in the cloud. These mileage records can be used internally to calculate employee expense reimbursement and externally to prove compliance in case of an audit.
Besides capturing total mileage, Timeero allows you to view employees' location in real-time, their driving speed, and even replay the route they have taken.
Timeero’s GPS tracking technology allows you to track employees' movements in real time. The app’s breadcrumb feature lets you track every route your employees take retroactively. With these tools in use, there will be no under-the-radar detours to increase your reimbursement costs.
Timestamps can be found on each mileage entry, boosting credibility. These additional verification measures will keep the IRS from having a reason to object your mileage records.
With accurate mileage tracking technology, your employees don't have to make rough mileage estimates or even worry about mileage expense tracking.
With no paperwork and administrative tasks to complete, your employees will be free to focus on their jobs. Automating daily tasks tends to have a positive impact on employee accountability.
As a manager, you have the ability to monitor each team member's performance by analyzing detailed mileage reports. Generating custom reports also increases the productivity of your administrative department by reducing the time spent on double-checking an avalanche of trip details and trying to identify potential incongruencies.
By integrating with bookkeeping payroll and invoicing platforms such as QuickBooks, Gusto ADP, Xero, Paychex, or Paylocity you can eliminate excessive paperwork, reduce human error, and calculate payroll calculations in a snap.
By integrating Timeero with your payroll software of choice, your job becomes so much easier. This functionality allows you to streamline your workflow processes by seamlessly transferring data between the apps for faster reimbursement and payroll processing.
To learn more about how to use an app to track mileage for work, check out our Complete Mileage Tracker Guide.
Employees will worry if using a GPS mileage tracker will invade their privacy, especially when they're off the clock.
Timeero, only captures and stores locations when an employee is clocked in. Additionally, the system notifies workers when their location is being tracked.
To make tracking transparent, a blue flashing icon will appear on iOS and a notification will appear on an Android device.
Once an employee clocks out, tracking stops.
The logbook tracking method is an old-school system, which requires you to log business miles using pen and paper or Excel spreadsheets. Employees have to track miles and enter travel details manually after every trip.
If you plan on filing tax returns, keep in mind that the IRS can request an audit at any time. Therefore, it’s important that your expense documentation is compliant and regularly updated.
To make it easier for your employees to enter data, use a mileage-reimbursement policy to outline the information the IRS requires:
This method can be particularly complex for employees who visit several worksites within their shift, such as home health agents or construction workers.
When it comes to transparency, this method doesn't allow you to check whether your workers have taken longer routes, exaggerated mileage, or ran personal errands during business trips.
Now that we’ve discussed the best way to track mileage for work, we can discuss another important issue: maximizing your mileage deduction.
To lower your taxes and receive a tax return, be sure to keep accurate and timely records of all business trips made by yourself and your employees.
Take note, only business miles are deductible, which can be a problem if a vehicle is used for personal and work purposes. To avoid misattributing mileage under the wrong trip classification, separate mileage records and use a mileage tracker.
For your mileage claim to be accepted, it’s important to understand the IRS’s definition of business mileage.
The IRS will only allow you to file tax returns on miles driven with the goal of growing your business. The IRS doesn't consider commuting to and from work a business expense.
If you choose to reimburse your employees for the number of miles they drive to get to work and travel back home, keep in mind that you won't be able to request a tax refund on those expenses.
According to the IRS, the following examples of business mileage are considered deductible:
Unfortunately, stopping by the nearest Starbucks to grab a cup of joe doesn't constitute a business expense.
Business mileage should be properly logged and separated from personal trips.
It's worth mentioning that employees can no longer claim mileage deductions, but you can continue to reimburse them for business use of their vehicles.
When deciding how to track mileage for work, take into consideration that there are two methods for claiming tax write-offs on your business mileage - the standard mileage rate or the actual expense method.
Choosing a reimbursement method before you start tracking mileage for work is essential. The method you choose determines what kind of calculation you will use, how your records will look, and what evidence you need to collect when submitting claims.
The IRS establishes the standard mileage rate which is the amount you can deduct from every business mile driven.
The standard mileage rate for 2024 is 67 cents per business mile.
The reimbursement you issue to your employees can be higher, but you'll be able to claim only up to 67 cents per mile.
This method is pretty straightforward - simply multiply the number of business miles driven by 67 cents, and that's the amount of your tax write-off.
You can also use our free IRS mileage reimbursement calculator to quickly estimate your deduction based on your business mileage.
If you opt to use the standard mileage rate method, you must substantiate your claims by providing the exact date of travel, miles driven, and business purpose. 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.
These expenses include:
To claim these vehicle expenses, you will need to show receipts to substantiate your claim.
If the car is used for personal as well as business purposes, you must determine the percentage of which the vehicle is used for business miles and multiply it by the expenses.
For example, if an employee drove 20,000 miles and 10,000 miles are business-related, you can write off 50% of all car expenses.
You will need to continue tracking mileage for work even if you're using the actual expense method. Keeping mileage records is the only way to separate business and personal miles and provide the evidence to the IRS.
The best mileage tracking apps calculate reimbursement amounts automatically, eliminating the need to figure out complex calculations and complete time consuming paperwork.
Staying on top of business mileage logs is a lot of work, but it's necessary if you want to cut business expenses and hold your employees accountable. No matter which one of the methods you use to calculate business miles, consider using 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 price.
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.
Check out a comprehensive Timeero review to explore Timeero’s features in detail.
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, but this method is often error-prone.
By using the Timeero mobile app, you can track daily mileage easily. With a simple clock in, the app will begin tracking mileage once it recognizes you’re driving and keep track of total miles driven.
The best mileage tracking apps track business-related mileage and routes easily and accurately. Timeero's mileage logs can be used to claim mileage reimbursement, and the software can also 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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