In order to properly track mileage for tax purposes, the IRS has a short, but strict set of rules that every person must adhere to if they're going to claim mileage-based deductions on their tax return.
Navigating the intricate landscape of tax deductions demands a thorough understanding of mileage log requirements. A meticulously maintained mileage log is not just a compliance necessity but a strategic tool in maximizing your tax savings. In this comprehensive guide, we will delve into the specific IRS guidelines for mileage logs, emphasizing the importance of precision and offering insights on simplifying this process.
Understanding IRS Mileage Log Requirements
The Internal Revenue Service (IRS) imposes stringent criteria for individuals and businesses seeking mileage-related tax deductions. Here's an in-depth exploration of the key requirements:
A record of your mileage: Maintaining an accurate record of your mileage is not only common sense but also a critical aspect of any mileage deduction request. While it might seem obvious, stating the precise number of miles driven is essential. Your mileage log should reflect the actual mileage you intend to deduct.
The date of your business trips/rides: Ensuring the success of your deduction request involves more than just mileage numbers. The date of each business trip or ride is paramount, and this is where challenges often arise, especially for those relying on outdated paper mileage logs instead of modern solutions like Everlance. It's imperative to chronicle the date and mileage for each ride comprehensively. Equally crucial is the designation of each trip as a business-related venture since personal mileage isn't deductible.
Location & Purpose: Detailing the location and purpose of each trip adds another layer of accuracy to your records. This involves specifying the destination and classifying the nature of the trip—whether it's business-related or personal. This destination and classification information is fundamental to determining the legitimacy of your mileage deductions.
Every requirement above is automatically handled for you when you're using an automatic mileage tracking app such as Everlance.
Mileage Logbook - Manually document every trip's mileage after completion. Accuracy relies on noting the odometer reading at the start and end—a task that can be cumbersome.
Everlance Automatic Mileage Tracker - Simply download Everlance, sign up for free, and start tracking. The app automatically records your trips using GPS, ensuring precise and hands-free tracking. No manual entries, no mistakes—Everlance handles it all.
Winner: Everlance. The app's ease of use and accuracy make it a clear choice.
Record Business Trip Date
Ok, so Everlance is better and easier at recording mileage, but what about the date? This one might seem like a toss-up because how hard is it to add a date? Except, as you'll see - it depends on if you remember to do it!
Mileage Logbook - Adding the date manually seems straightforward, but procrastination often leads to issues, especially when recalling details at the end of a week or month.
Everlance Automatic Mileage Tracker - Everlance automatically records the date and time of each trip. No forgetting or delays—every trip is accurately timestamped in real-time.
Winner: Everlance. Automatic and immediate logging ensures precision without the risk of procrastination.
Record Business Location & Purpose Of Trip
Lastly, let's see how Everlance fares in the final requirement. Can it beat a paper logbook at recording locations & trip purpose? Let's find out!
Mileage Logbook - Limited by its manual nature, a logbook may include basic details like start and finish points, purpose, and total mileage. Accurate but monotonous. Start: 124 Main St. Chicago, IL End: 568 Poplar Rd. Milwaukee, WI Total Mileage: 563 miles Purpose: Deliver package Of course, this works and it's accurate. Monotonous, yes, but accurate regardless.
Everlance Automatic Mileage Tracker - Swipe left or right after a trip to classify it as business or personal. Effortlessly log the entire route on a map, providing a visual representation of your journey and its value. Add notes
Winner: Everlance. Beyond ease of tracking, Everlance offers a visual map of your route, trip value on one screen, and allows you to classify with an easy swipe or set up pre-determined rules to help classify purposes for you.
Whether you opt for a paper logbook or an automatic tracking app like Everlance, the IRS prioritizes accuracy and compliance. For those seeking a faster, more efficient, and 100% IRS-compliant solution, Everlance stands out as the superior option. Sign up today to get started for free!
We help people save time and money. At Everlance, we're on a mission to empower mobile workers and businesses. That sometimes leads us to generalize tax information. Everlance team members are not certified tax professionals. If you need help with your specific tax situation, please reach out to your tax advisor.