Mileage deductions are one of the best tools for lowering your taxes each year, but tracking the exact numbers can be a pain when you’re always on the go. This year, the IRS officially raised the standard business deduction from 53.5 cents per mile (in 2017) to 54.5 cents. They also raised it for medical mileage by one cent—from 17 to 18—while leaving the charitable driving service deduction at 14 cents per mile. Thus, if you’re racking up the miles, it’s worth it to keep track of this information. However, log books and business diaries are a thing of the past. Here are some new (easier) ways to organize this data for next year’s tax season.
When they said, “There’s an app for that”—well, they meant it. Especially if you’re already using QuickBooks for your other accounting needs, consider adding this tool to your smart phone. While it has many popular bookkeeping functions, it also includes a built-in mileage tracker. In comparison with its competitors, this app uses relatively little memory and very minimal battery life, which is a common complaint about these tools that require constant GPS monitoring.
Some “smart” trackers are more accurate than others, but this one ranked pretty high. It also includes a function that tracks the mileage of essentially all your trips, but allows you to separate them into categories, such as “business” or “personal.” Additionally, thanks to the comprehensive nature of this app, you can also log other expenses such as food or supplies while you’re on the road. Having these capabilities at your fingertips allows you to record deductions that many people miss right away (before you have a chance to forget about them).
Then, at the end of the year, you’ll automatically get an IRS-friendly report. So, no need to tally up the miles or create your own spreadsheet for your accountant! Yet another benefit is that QuickBooks Self-Employed will compare your business miles to your other auto-related expenses to recommend the best deduction for you (standard mileage vs. actual expenses). Although there is a small fee associated with this option—of $10 per month—it can end up minimizing your weekly record keeping time, so you get to focus on your business instead.
As one of the earlier options for mileage tracking, this app’s recent upgrades have made it much more user-friendly. It also gives you a little more control, so you can determine which trips it tracks, rather than having it run constantly in the background. If you only want to start when you’re plugged in to conserve battery life, you can do that! Just make sure you plug it in before any business-related drives.
For the basic features, this app is completely free, but you can also subscribe to daily updates and more advanced options for a small fee. The automatic Bluetooth linking is a nice addition, but it’s not a necessity for everyone. For the fuel-friendly user, it includes a tool to estimate your gas mileage and find the cheapest gas options near you. Plus, you’re still getting the hands-free tracking you signed up for!
Well, our report wouldn’t be complete without a completely free option, and this one is a pretty strong contender. This mileage tracking app also runs in the background, either when you elect to start or automatically, which minimizes your data and battery usage overall. It also incorporates extra expense-tracking functions for food, tolls, services, etc. so all your records can be in one place come tax time. Many people appreciate the pre-loaded categories and explanations that allow them to save even more time when organizing these deductions. Plus, it records a map of your drive in addition to the mileage, which is convenient little bonus.
Ultimately, which app you decide to use is up to you. The most important thing to consider when narrowing your choices is the answer to this question: Which one will you actually use? Try to find the one that works the most effortlessly for you, and keep it. Not only will it streamline your mileage deduction for 2018’s tax season, but also it’ll give you more time in your day. That’s what we really try to accomplish at ENSO Accounting.