Tracking Miles for Taxes

[nfl72]

I got audited for 2014 and 2015. For my miles I had hand written logs with total miles, cities I drove to, and a few names of people I met with each day I drove.

Everything was A ok with the IRS.

 

[indiana260]

I got audited for 2014 and 2015. For my miles I had hand written logs with total miles, cities I drove to, and a few names of people I met with each day I drove.

Everything was A ok with the IRS.

I get audited more then Donald Trump and use a similar method of proving my mileage. Never even raises an eyebrow.

Funny thing is, when you get the dreaded letter saying your under audit it says the issue they want to review them explains each. On mileage it says "if you didn't keep a record recreate your mileage or bring appointment books, maintenance records ECT" So all this tracking is really not required. I am not suggesting not to teach milage tho

 

[Bod]

Thanks all. Does MileIQ still work if you lose cell service? I have T-Mobile and they're not the best once you move out of town.

I kind of like the idea of tracking everything in Excel and using an app like MileIQ—but a free one to save $60—to confirm my accuracy in case I missed something. Sounds like that might be similar to what shonceman is doing.

I'm definitely not afraid to pay for good apps, but like to use spreadsheets when I can. In that case, an app would still come in handy in case I forgot to mark my mileage in the Excel sheet or a physical mile log.

 

[VolAgent]

I get audited more then Donald Trump and use a similar method of proving my mileage. Never even raises an eyebrow.

Funny thing is, when you get the dreaded letter saying your under audit it says the issue they want to review them explains each. On mileage it says "if you didn't keep a record recreate your mileage or bring appointment books, maintenance records ECT" So all this tracking is really not required. I am not suggesting not to teach milage tho

Yes, but you will do a much better job doing it on the front end versus trying to recreate on the back end. If you don't track it now, then you are just guessing and you could guess low on mileage just as easily as you could guess high.

 

[nfl72]

I prefer to fudge up not down!

 

[LivinDaDream]

Just curious how everybody here is tracking their miles. Paper? An app? A spreadsheet?

You need to track the destination and business purpose of your trips. Does this mean you track every trip you take during the day. Say five different trips for five different appointments? Or do you just track the total miles per day?

Is it true that every single mile for business purposes (ie driving to a leads town) is worth $.535?

Suppose you drive 1000 miles a week 52 weeks a year for 52,000 miles. Thats 52,000 * .$535 = $27,820. Let's say you made $100,000 in profit that year. Would you deduct $27,820 from $100k and be taxed as if you earned $72,180 that year? Or would you deduct the $27820 from your entire tax bill? (I assume it's the former, because the latter sounds too good to be true.)

I heard of an app that is being released soon designed for the life agent- that you will not only be able to input and track your mileage but you will be able to take a picture of your receipts- upload straight into the app which willl allow you to track and keep up with your deductions on the road.

 

[SammyJ]

I'm willing to bet if you guys are getting audited on milage Your % of total write-offs to gross income is very high. Example is if you grossed $150k your writing off $90k total and only paying tax on $60k. The low % you're paying income tax on is being flagged by the Irs computers thus it goes to a human to manually look at.

 

[MilaCohen]

By far the best way to prove to the IRS how much you drove for business is to keep contemporaneous records. “Contemporaneous” means your records are created each day you drive for business, or soon thereafter.

A mileage tracker app like MileIQ may be one of the easiest ways to provide what the IRS wants. It automatically tracks, logs and calculate your mileage for each trip. It can also provide a mileage log that can stand up to IRS scrutiny.

 

[Bod]

To those of you who have MileIQ--how does it work if you lose cell coverage? It's based on GPS, I think, so it should be okay?

If you have an iPhone, Everlance looks much nicer than MileIQ. I can see myself forgetting to input my mileage if I do it manually. So if MileIQ (or Everlance) is always accurate, that's appealing. I can see how it would save time...especially during working hours.

 

[jdeasy]

By far the best way to prove to the IRS how much you drove for business is to keep contemporaneous records. “Contemporaneous” means your records are created each day you drive for business, or soon thereafter.

A mileage tracker app like MileIQ may be one of the easiest ways to provide what the IRS wants. It automatically tracks, logs and calculate your mileage for each trip. It can also provide a mileage log that can stand up to IRS scrutiny.

I have an appointment book where I write down my appointments for the day.

Each day when I get I write down the miles driven to those appointments. It doesn't get much easier than that.

And if someone wants to check it you have the miles and where you went right on each page.

No reason to over complicate this.