If you drive for work as a 1099 contractor or self-employed individual, you can claim a big tax write-off on your business mileage, which is great! You can either take the standard mileage deduction, which is meant to cover costs such as gas, insurance, registration, repairs, and depreciation, or calculate out your actual expenses. For more on what that means and what method is best for you, we've written a standard mileage deduction vs. actual expenses guide that you can check out to understand more, and calculate for yourself!
In the not-so-distant past, meticulously logging business mileage meant wrestling with paper logs, a task that often left drivers with a twinge of unhappiness. The familiar sight of a mileage log book, whether adorned with a company logo or a simple pad of paper, symbolized the laborious process of recording every trip, calculating distances, and wrestling with estimates at the kitchen table. While undeniably effective, the repetitiveness of filling out these logs has left many pondering a fundamental question: could there be a better way?
That's why in 2024, millions of drivers have made the switch to automatic mileage tracking apps like Everlance to save time, money, and headaches along the way.
Automatic mileage tracking apps eliminate the hassle of paperwork, saving hours of effort each year. This guide covers the key differences between tracking mileage manually versus using an app., but before we get into that..what happens if you don't keep a log?
Some drivers attempt to claim business mileage deductions without keeping thorough supporting documentation like mileage logs. However, this carries substantial audit and tax penalty risks.
According to IRS guidance, mileage deductions are only permissible when drivers maintain adequate records. This includes detailed logs with date, route, purpose and odometer data for every business trip.
Without sufficient documentation, the IRS can:
Lack of records also makes it impossible to differentiate business vs. personal miles with any accuracy. Estimating or guessing miles driven for work fails to meet the IRS standards.
Using a mileage tracking app generates digital logs that document business mileage unambiguously. This provides peace of mind and confidence during tax time. No need to worry about audit exposure or penalties!
Now that we've covered that, let's dive into the topic at hand
For decades, drivers recorded business mileage in log books. These physical records have been the go-to method for years, providing a tangible way for drivers to account for every mile traveled for work. Workers must diligently fill out logs by hand after each drive, turning them into an accountant later when tax time came around. These contain fields for data like:
The manual process is functional but cumbersome. Pros of keeping a manual mileage log include the simplicity of the method, its accessibility, and ensuring only business trips are recorded. However, cons include the time-consuming nature of manual data entry and the potential for errors, or just simply forgetting to do it and leaving money on the table.
Most mileage tracking apps use GPS services right from a driver's phone to automatically record trips in real-time with no effort on the driver's part. The driver then designates the trip as work-related or personal. As trips accumulate, potential deductions add up in real-time. Many apps include automation to assist with classification, such as learning frequent trips or rules-based classification like setting standard work hours.
This combination of automation and compliance has led to millions ditching their old mileage logs and turning their phone into their personal assistant.
The process is actually quite complex behind the scenes. Apps like Everlance use GPS to coordinate your exact position and rate-of-speed to determine that you're driving. When the app detects that you're driving it starts recording the route, in visual detail, and applying the IRS's Standard Mileage Rate to each mile you drive. Showing you in real-time how much money each trip is worth to you.
Data exports are available to you at any time
Apps can intelligently classify trips as business or personal, and they go beyond mileage by capturing additional expenses such as gas, fees, and supplies.
Another key differentiator of using an app instead of a paper log is the ability to easily include your business expenses in one place, which also can be tax deductible. This is important because not only can it assist you in making sure you are maximizing the deductions available to you(remember back to the point about standard mileage vs. actual expenses method), but it also includes non-vehicle expenses that are related to your business, such as a portion of your cell phone bill or health insurance premiums.
Many mileage tracking apps, such as Everlance, will also include features such as automatic expense tracking, and intelligently look at your expenses to help you determine what might be a write off (We call it deduction finder here)
Hopefully it’s clear by now that automatic mileage trackers like Everlance are miles ahead of old-school paper mileage logs. For drivers of all kinds, our app minimizes the hassle of tracking miles and expenses.
Manual logs are tedious with limited upsides. But with Everlance, it's easy street:
Whether you drive full-time or only occasionally for work, Everlance takes the pain out of mileage tracking. The only thing you should focus on is the road ahead - we’ll handle the tracking!
Everlance offers affordable plans that include:
Free provides users with unlimited manual tracking (Just push stop and start), as well as 30 automatic trips per month. It's great to test the waters if you're hesitant to give up the old paper mileage log.
Premium provides full automatic mileage tracking, expense capture, deductions maximization, reporting, and more. It's a no-brainer for frequent drivers.
Premium Plus gives all the advantages of Premium, while also offering VIP customer support and a 1x1 user onboarding session. It's our most white-glove service.
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.
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