As an entrepreneur, finding ways to save money is critical to ensure the success of your business. There are many ways to do so, but one that tends to be overlooked is mileage reimbursement.
For those who started their business recently and still don’t know how to proceed with tax deductions, know that you can claim the miles you drove for business purposes. If your work-related commutes are long, you can earn a hefty deduction at the end of the year. The IRS releases annually the rate each business mile driven is worth. For 2017, it was 53.5 per miles for driving to a job assignment.
What Qualifies as a Business Drive?
In order to claim a tax deduction for costs associated with driving a personal vehicle for business purposes, your starting point must be your home, office or a job location.
The destination must also be home, office or job location, but the IRS doesn't allow to side trips between two points. Your commutes have to be relatively straight to your work-related assignment.
Additionally, you can also include certain mile drives for other business related reasons such as cashing a check at the bank or meeting with professionals regarding your business.
How to Keep Record of Your Business Trips
If you want to deduct the miles driven to and from a job assignment, you must keep a record of all your business related drives. This includes the distance driven from your starting point, stops along the way and final destination. You must also add the date and time of the trip and business purpose.
You must keep any receipts associated with your work-related commutes.
All this could be taking time away from your business. Thankfully, there are several apps today that will track all of this for you and even create reports you can use when filing your income tax.
Useful Apps to Track Mileage
These are some of the apps you can use to track your business miles and claim them in your income tax. Some of these applications are free while others have a monthly fee that you may also deduct as a business expense:
This is one of the best mileage tracker apps. The application works in the background as you drive and automatically keeps a record of all your commutes. Then, you can select whether it’s a personal or business drive and add the purpose of your trip (visit with a client, office supply/errands, in-between meetings, etc.). You can also get detailed reports of all your drives divided per month.
Everlance (Android & iOS)
Just like MileIQ, Everlance also tracks and logs your commutes automatically. But it does so much more than that; this application also keeps records of your income and expenses, has an option to include receipts, and provides an overview of taxable income. You can easily export all this into a CSV file.
While the app has a monthly fee, you can log up to 30 drives per month for free. As their website states, this app could help you “save $6,500 in tax deductions.”
Hurdlr (Android & iOS)
Much like the other two applications, Hurdlr also tracks your mileage with the purpose of filing your taxes. Unlike the other two apps, this one is always free. At the very least, its basic features are, and these include: Unlimited Auto-Mileage Tracking, Add Income & Expenses, Tax Calculations Summary & Export/Email Reports.
Basically, this app can cover all your business’s basic accounting needs and get you ready to file your income tax when the time comes.
Claiming your worked-related driven miles is a clever way of saving money, but so is finding the right insurance for your business. Whether you need Commercial Auto Insurance, Commercial General Liability Insurance, or Business Owner Policy, Infinity can help you save more while giving you the peace of mind you need to successfully your business. Call one of our friendly agents today at 1-800-INFINITY for a free quote or visit our website.