Any legitimate way to keep your taxes down is welcome and can help you be more profitable at the end of the year. One of the most useful deductions is your allowance for business use of your personal vehicle – or company vehicles – but logging all of those trips the traditional way, on paper, is pretty tedious. Mileage tracker apps can help by cutting down the time and effort it takes to log your trips, freeing you up to be more productive.
Why Businesses Track Mileage
There are as many reasons to track mileage as there are businesses, but the most fundamental is keeping tabs on your deductible expenses. A well-kept mileage log can provide big savings come tax time, and that's worth the minimal cost of an app. There are less obvious benefits, as well. If you maintain a fleet of delivery vehicles, for example, a look at the mileage tracker's logs can tell you which of your drivers plan their routes most efficiently. You can leverage that knowledge to help your less-experienced or less-analytical drivers get better use out of your vehicles. If you maintain a field sales force, their logs give you some insight into how aggressive and active each salesperson is. Mileage tracking logs can even help you track the ratio of city-to-highway driving for your company-owned vehicles, which gives you finer control over when you maintain and replace them.
IRS Rules for Tracking Mileage
The IRS has a lot of rules around what you can and can't deduct. Your morning commute isn't deductible, for example, but mileage between the main office and satellite offices is. Any mileage you put on while going to and from conferences, client sites or mandatory training sessions is also deductible. To claim your mileage expenses, you'll need to track the date and purpose of each trip, its start and finish points, the beginning and ending mileage and any parking costs, tolls or other expenses you incur. You have two options for claiming the deduction: Either use the standard mileage rate set each year by the IRS or track your actual costs. The standard rate includes allowances for maintenance and depreciation, so you can't claim those separately. If you're uncertain which option to use, track your real expenses for a chosen period and compare them to the standard rate. Tracking real expenses is a lot more work, which is a good reason to use a tracking app, but in some cases, it can give you a bigger deduction.
The Best Mileage Tracker Apps
Most mileage tracker apps follow the same pattern, using your phone's GPS to automatically log the beginning and end points of your trip. After you've entered a destination once, the apps remember it and automatically log it for you in the future. The differences between them lie in the fine details, and how well the interface is laid out.
Mile IQ: Mile IQ is famously simple to use. It automatically logs every trip, and you sort them as business or personal by swiping left or right. Your trip data is backed up automatically to the cloud, so you won't lose your log if your phone is lost or broken, and you can view your data and generate reports on any computer or mobile device. There's a free version of the app that allows for up to 40 trips per month, or you can buy the premium version by the month or the year as needed.
Triplog: If you need a more robust tool, Triplog might just fit the bill. Whether you need to track your own car, a sales team in personal vehicles or a company-owned fleet or any combination of those things, Triplog has you covered. The Enterprise version, for fleet management, will exchange data directly with accounting programs such as Quickbooks or Concur. For more demanding users, Triplog's application programming interface, or API, makes it possible to custom-tailor how you use the program's data.
Hurdlr: Hurdlr has an option for just about any entrepreneur, whether your money comes from a ride-sharing side gig or a full-blown fleet. The free version of the app is suitable for casual or side gig use, the paid Premium version adds improved reporting and the ability to set your own work hours, so it stops tracking your trips when you stop working, and, like Triplog, there's an Enterprise version and an API for fleet operators and power users. Best of all, it'll automatically calculate your state and federal taxes in real time so you always know where you stand.
Mile Catcher: If you're just starting out and your budget is tight, Mile Catcher might be your new best friend. The free version of the app gives lifetime unlimited trip logging and unlimited reporting, so it's all you need while you get your new enterprise off the ground. As your needs grow, you can upgrade to the Premium version which provides a raft of extra features including access to all your data through the company's web portal, auto-classifying repeat trips, bulk-classifying trips retroactively up to 60 days later and letting you delegate management of your account to an accountant or administrator.
Quickbooks Self-Employed: If you're already using the self-employment edition of the popular accounting program Quickbooks, a powerful mileage log comes as part of the package. It monitors and logs your trips like any other mileage tracker, but because it's part of your overall accounting suite it can do other extremely useful things like adding the cost of a specific trip to the invoice you generate for that client. It handles all of your other deductible expenses as well and tracks your quarterly tax payments for you. If you opt for the bundle with TurboTax, you can seamlessly transfer your mileage information to your Schedule C.
- U.S. Internal Revenue Service: Standard Mileage Rates for 2018 Up from Rates for 2017
- U.S. Internal Revenue Service: Topic No. 510 - Business Use of Car
- U.S. Internal Revenue Service: Publication 463 - Travel, Entertainment, Gift, and Car Expenses
- MileIQ: How it Works
- Triplog: Home
- Hurdlr: Home
- Mile Catcher: Plans and Pricing
- Intuit: Quickbooks Self-Employed
Fred Decker learned business fundamentals at second hand as an insurance and mutual funds broker, and at firsthand as a retail store manager and the chef/proprietor of his own restaurants. He has written hundreds of business-related articles for sites including Zacks.com, Chron.com, Vitamix.com, Bizfluent and GoBankingRates and many others. He was educated at Memorial University of Newfoundland and the Northern Alberta Institute of Technology.