Keeping a mileage log is crucial to ensuring that your business miles are correctly tracked. Whether you’re an employer who wants to deduct mileage for your drivers or an employee who receives reimbursement, there are numerous benefits to keeping accurate records of your business miles.
Historically, claiming mileage expenses was a manual and time-consuming process that relied on pen and paper or hastily-scribbled service station napkins. Thankfully, mileage-tracking apps have emerged to take the pain out of this tedious process.
Saves Time
One of the most significant benefits of keeping a mileage log is that it saves you time. Instead of wasting time writing down each trip, you can use a free mileage log template or a tracker app to document each day’s mileage.
Aside from saving you time, a mileage log can also help ensure that you follow IRS guidelines for keeping track of your business miles. If you’re a freelancer or independent contractor, you must keep detailed records of your mileage for tax deductions.
Moreover, a mileage log can help you get reimbursed for your travel expenses. It can also allow you to deduct your fuel expenses from your taxes.
However, keeping a mileage log is more challenging than it sounds. Unless you are organized, it can be easier to write down every mile for the entire year.
In addition, paper logbooks or Excel spreadsheets can take up much non-revenue generating time. Moreover, they can be inaccurate, leading to inefficiency and tax penalties.
Saves Money
Keeping a mileage log is a vital part of managing your business expenses. It can save you money by allowing you to deduct fuel costs from your taxes and keep track of how much fuel your car uses.
A mileage log can be as simple as a notebook or as complex as an Excel spreadsheet. It should be updated regularly to ensure it is accurate and meets IRS requirements.
If you are a rideshare or delivery driver, a mileage log is also vital for getting appropriately reimbursed. The record should include details of the business purpose, origin and destination, odometer readings, and miles driven.
Keeping a mileage log has many benefits, including improving financial records and increasing safety. Using a digital mileage log is the best option, as it does not require paper and can be stored for up to five years in case of an audit.
The IRS requires mileage logs that record the date, business purpose, origin, destination, and odometer readings for each trip made in a vehicle. In addition, it must contain exact mileage amounts for each trip.
Increases Productivity
Keeping a mileage log may seem like a minor detail, but for employees who drive for work, it can add much time to their day. The time it takes to keep track of every trip can be time spent away from more critical tasks, such as showing homes or meeting clients. If your company has many drivers who must report their mileage, it could drain the entire office’s productivity.
Fortunately, technology has made it easier for businesses to keep track of mileage. Previously, employees had to manually enter each week’s or month’s trips into spreadsheets, which can be time-consuming. This is no longer the case, as mileage tracking systems allow employees to enter a starting address and destination. Then the system calculates the distance based on GPS or odometer readings. This eliminates human error and allows for accurate, real-time reimbursement of miles traveled. This is a win-win situation for everyone, especially if employees are reimbursed for the mileage they drive.
Increases Safety
Keeping a mileage log is not only beneficial for fleet managers, but it can also be helpful for drivers. Much paperwork is associated with fleet management, including CDL licenses, inspections, training, and hours of service (HOS). Mileage can play a significant role in calculating CSA scores, but it can also be one of the most straightforward tax deductions for drivers.
However, a recent study found that many drivers need to use their mileage log properly and risk losing years of deductions. For example, if HMRC spot checks and finds that your records don’t match up with fuel card invoices, you may face a significant penalty. This is why it’s essential for drivers need to keep a mileage log. Fortunately, many easy-to-use smartphone apps make logging trips much more accurate than paper mileage logs. These apps also make it much easier for drivers to accurately record their mileage, which helps ensure compliance with IRS rules and regulations. This can save companies money and time and improve customer trust. With this in mind, it’s no wonder why so many companies are turning to mileage log templates for their drivers!
Increases Tax Deductions
Keeping a mileage log increases tax deductions if you’re a small business owner, an independent contractor, or want to get reimbursed for your miles. Having records that prove your mileage will help protect your company from IRS audits and allow you to claim business miles even if you’re not using a vehicle for your transportation.
The mileage log should record each trip, including the name of the person or company you’re visiting and the date you traveled. It should also include the number of miles you drove so that it can be used to calculate your mileage deduction.
If you’re going to keep a physical mileage log, it should be updated at least once a week. You can use a paper mileage log book or an app that tracks your miles and automatically generates reports.