Business Mileage...How to track it

What Qualifies as Business Mileage and how do I track it?

 Most new and seasoned business owners have questions in determining what actually qualifies as business mileage. It is important to make sure you understand the rules of tracking mileage as the IRS views mileage as low hanging fruit during an audit. Below are some of the rules and tips for tracking business mileage and travel.

• The mileage from your home to primary place of employment is not considered business mileage. This is qualified as commuting. Even if you take business phone calls during your normal commute it is not considered business mileage. Please keep in mind that commuter miles are not business miles.
• What is considered business mileage then? If the mileage is “ordinary and necessary” for your business, then it will be a deduction. Some examples are: driving looking for rentals, meeting clients, picking up supplies related to your business, mileage to the airport for work travel.
• Do I need to keep gas receipts and a mileage log? The answer to this question is to keep either/or. With gas prices down, most business owners gravitate towards keeping a mileage log as it is currently deducted at .54 cents a mile.
• What is a legitimate mileage log? There are multiple ways to keep records for mileage in case of an audit. Some of our clients use the pen and paper method and others use Apps for their phones. If you use the pen and paper method, you can simply record the beginning odometer reading and the final reading of the trip. It is also wise to put the odometer reading on the gas receipts. These methods are a little tedious but an ounce of prevention goes a long way. If you chose to use an app on your phone, it is important to make sure that you chose one of the top apps from the app store. These apps normally have been tested and keep an accurate audit proof log on your phone.
• Is business mileage beneficial? Absolutely yes. Being able to deduct business mileage is one of the benefits of being a business owner. Business Mileage is one of the most overlooked but beneficial deductions that we see.