How to Track Mileage Easily for Tax Deductions
Nashua Resident Seeks Suggestions
The mileage that you drive each year for business purposes can really add up, making this a significant deduction on your taxes. Whether a company vehicle, or your own car for business purposes, the 2019 deduction is 58 cents per mile. It is important to keep excellent track of this mileage as a record in the event of an IRS audit.
A Nashua resident had recently started using his own vehicle for business purposes. Looking for a deduction on his taxes, he contacted Merrimack Tax Associates for suggestions on keeping track of this mileage.
Mileage Tracking Apps Make this Tax Deduction Easy
Many business owners are left scrambling in March and April trying to calculate their mileage total from the previous year prior to filing their taxes. Of course, the simple way is to track the mileage at the time, but this can be easily forgotten and overlooked.
With the abundance of smartphones today, there are many mileage tracking apps that simplify the guesswork in tracking your business’ mileage. The process is as simple as downloading an app on your smartphone, enabling it at the start of a business trip in the vehicle, and stopping it when you have reached your destination. The app will calculate the mileage, keeping a running total of miles for the year.
QuickBooks Offers Mileage Tracking Option
For businesses utilizing QuickBooks Self-Employed as their bookkeeping system, this software actually has a built-in mileage tracker. You can set this software up to track all mileage in a vehicle, categorizing it as personal or business. Then at the end of the year it will automatically tally and deduct these business miles.
It is important that any company vehicle have mileage tracked for future tax deductions. If it is a company truck, owned and operated only by the business, you may consider just tracking the annual mileage on the vehicle. However, it is wise to have a breakdown of the routes and dates for documentation purposes, even when the vehicle is used only for the business.
This Nashua resident now has the tools to take advantage of these mileage deductions on his taxes. Tracking the mileage throughout the year will save him plenty of headaches down the road in the event of an IRS audit.