For decades, independent contractors who drove for business had no method of tracking their mileage besides keeping a pen-and-paper mileage log book. Not only was writing down the information for every business mile traveled a hassle; it also left tax filers prone to errors that could cost them hard-earned money. Fortunately, now there are other alternatives for keeping your mileage report.
Of course, using a phone or computer to keep tabs on sensitive tax information can be an intimidating task, especially if you aren't particularly tech-savvy or haven't used technology for this purpose in the past. That's why we’re providing you with the basic information you need to know on how to track your mileage using modern methods.
If you’re self-employed and drive for work purposes, you are entitled to reimbursement for your business mileage from the IRS. Jobs meeting the criteria for tax returns include, but are not limited to, independently working ridesharers, delivery drivers, salespeople, medical workers, real estate agents, and others. Miles driven for charity or moving purposes may also qualify for reimbursement.
However, keep in mind that under most circumstances, commuting between your home to your regular workplace does not count as business mileage. You are only considered to be driving business miles when you are traveling from one worksite to another.
If you meet the criteria above, you will need to keep a simple mileage log to track the miles you drive.
The IRS Standard Mileage Rates for the 2020 tax year are:
Of course, these rates are only relevant for your taxes if you know the amount of each type of mile you have driven throughout the year. This is where a mileage log comes in handy.
Aside from the obvious benefits of saving time and reducing hand fatigue, utilizing technology to track your mileage comes with several advantages. Thanks to being neater and more legible than handwritten notes, digital mileage logs make it easier to spot errors.
Additionally, the ability to store and quickly download reports as you need them, means that your mileage files won't get lost. And, you won't need to spend hours rifling through every drawer in your home to find papers when tax season rolls around. These factors help ensure that your tax paperwork is accurate and can potentially save you more money than you would expect.
Creating a mileage sheet using Excel is a popular option among many drivers. When making a business trip log this way, it's essential to make sure your information is accurate, detailed, and IRS mileage log compliant. Your log should make note of each trip you take, listing out how many miles you drove, where you went, and the date you traveled. It’s also recommended that you track your personal trips to make it easier to calculate the number of business miles you drove over the course of the year. Our free mileage log template provides a straightforward format for you to list all of this information.
However, while Excel and Google Sheets is an effective way to store your information neatly and back it up in case of emergencies, this method does have its downsides. It’s difficult to update a spreadsheet on a small phone screen, so you will most likely still need to jot down notes as you drive and type the information out on your computer later. At the end of the day, it could be time consuming, and some of what you write down may be lost in the transcription process. That is why we recommend using a mileage tracker app instead.
Using a mileage log app like Everlance is by far the easiest method of tracking business mileage. All you need to do is download the app, complete the initial launch process, and start driving. Your phone will automatically detect when you are driving even if the app is closed and take care of counting the miles driven. Your only responsibility is to classify your trips as business or personal before driving with a quick swipe left or right. If needed, you can customize your personal settings further to track miles in the way that makes the most sense to you.
To make managing all of your business expenses more manageable, you can also connect your bank account or credit card to the Everlance app and keep your expense details and photos of receipts all in one place. This allows you to record all the costs associated with vehicle maintenance, tolls, parking, and other expenses that may be tax-deductible for you.
However you choose to use it, Everlance provides a simple, foolproof method of creating a mileage log to save you both time and money. You likely keep your phone on you at all the times anyway. So why not have it track your business miles too and spare you the hassle of writing everything down?
Are you looking for a straightforward, IRS compliant Excel mileage log template? Our free downloadable Excel mileage log will help you track your mileage manually and contains all the information you’ll need to meet IRS standards.