A mileage log is essential whether you’re an individual or a business owner. It can help you keep track of the number of miles driven for work-related purposes and how much money you’ve spent on fuel and maintenance costs.
Keeping accurate records is essential for many reasons, including tax deductions and ensuring the safety of your vehicle. Learn why a mileage log is essential and how you can keep yours up-to-date and compliant.
Tax Deductions
Tax deductions for vehicle expenses are a popular way to reduce your business expenses and help you save money. But it’s essential to understand the different options and choose the best method for your company.
The first option is to claim mileage as a deduction. This is one of the easiest ways to reduce your tax bill and get a bigger payout.
However, it’s crucial to understand that only the number of miles you drive for business purposes is deductible under this method. If you travel for personal reasons, you can only deduct a prorated percentage of your costs.
This makes it especially critical for Uber drivers, Lyft riders, delivery, and other car-based independent workers to track their mileage. Using a log can make it easier to determine whether you can claim the right amount of mileage on your taxes.
A good mileage log should include detailed information about your business type, how many miles you drove, and which vehicles you used. It should also contain all your vehicle expense receipts and records for the year.
The IRS is strict about deductible mileage, and a mileage log helps you stay in compliance. You could lose a lot of tax savings if you’re not tracking your miles.
Vehicle Maintenance
If you own a vehicle, following the manufacturer’s maintenance recommendations and recording them in your owner’s manual is crucial. Failing to do so could void your warranty and rob you of much money.
Getting into the habit of routine maintenance can help keep your vehicle in good condition and extend its life. It’s relatively inexpensive compared to major repairs and can help you avoid breakdowns or other issues.
Every car’s owner’s manual has a maintenance schedule that tells you when to change the oil, filter, and other items. It also lists the intervals between services that need to be done to keep your car running smoothly.
It’s also important to check your engine’s coolant and oil levels. If your coolant level is low, you might scald yourself when you start the engine.
Another essential part of vehicle maintenance is ensuring all tires are properly inflated. Properly inflated tires will last longer and improve fuel efficiency.
Keeping track of mileage logs and ensuring that you can reimburse your employees can be difficult. Paper or Excel logs are standard options, but they have disadvantages. Having to track miles manually and risk losing them when employees leave can be time-consuming, especially if you have multiple employees working out of different locations.
Safety
As the workforce has become increasingly mobile, so has the technology used to capture and transmit data from the road. Mileage logs have sprung up in an almost unending number of forms, from the spreadsheet to the fancy pants computerized version with all the bells and whistles.
The most successful mileage tracking systems are designed to be easy to use. They can be incorporated into your overall fleet management strategy and used by individual drivers. As a result, your fleet will operate more efficiently, which is good news for your bottom line.
The smallest and most cost-effective way to achieve this is to provide your drivers access to their phones to keep track of their trips and tally their mileage. In the long run, this can save your company money and increase worker productivity.
The best mileage tracking systems will be able to display the most relevant information to your employees, such as how many miles they drove in their vehicle or how many hours they spent on the road. In addition, they’ll make it easier to monitor the health of your fleet and ensure all vehicles are in top-notch shape before and after every trip.
Insurance
You must keep an accurate mileage log, whether you’re a small business owner, a gig worker, an employee driving a car for work, or a real estate agent. It’s a necessary record of your business-related travel and can help you determine whether or not you’re on track to meet your goals.
You can create your mileage log in a paper logbook or with spreadsheets. Or you can use a GPS mobile mileage tracking app, such as MileageWise, to automatically track your personal and business trips.
Your mileage log is also important because it can help you make more informed financial decisions, such as how much to budget for transportation costs. It can also be used to identify areas where you may be overspending.
Aside from helping you save money, keeping an accurate mileage log is also beneficial for tax purposes. It allows you to calculate your standard mileage deduction and write off car expenses based on the percentage of miles you drive for business versus personal reasons.
Fortunately, several easy-to-use mileage tracking apps can help you maintain an accurate log and even offer IRS-proof reports. These tools can also save you significant time since you don’t have to manually fill in the information every time you drive for business purposes.
