Tracking mileage for business purposes may seem like a small detail, but it can have a big impact on your bottom line. Whether you’re driving to client meetings, running errands for the business, or attending networking events, every mile counts when it comes to deductions and reimbursements. Let’s explore why keeping a close eye on your mileage is essential for business success.
Maximize Tax Deductions
The IRS allows businesses to deduct mileage for work-related trips, and the deduction rate can add up quickly. For instance, if the rate is 65.5 cents per mile and you drive 1,000 miles in a year for business, that’s $655 you can deduct from your taxable income. However, to take advantage of this benefit, the IRS requires detailed records of your trips. Simply estimating won’t cut it—you need a log that includes the date, purpose of the trip, starting and ending mileage, and total miles driven.
Simplify Reimbursements
If you have employees or contractors who drive for work, tracking mileage ensures accurate reimbursements. This is especially important for maintaining trust and avoiding disputes over expenses. With a reliable mileage log, you can streamline the reimbursement process, saving time for everyone involved.
Avoid Auditing Headaches
The idea of an audit might send shivers down your spine, but meticulous mileage tracking can make the process less intimidating. If the IRS or other tax authorities question your deductions, a well-maintained log provides the proof you need to back up your claims.
Easy Tracking Solutions
Gone are the days of keeping a notebook in the car and jotting down every trip manually. Technology has made mileage tracking simple and efficient. Apps like MileIQ, Everlance, and QuickBooks automatically record your trips, allowing you to classify them as business or personal with a few taps.
Tracking mileage is an easy habit to adopt and pays off in multiple ways. It’s one more tool in your arsenal to ensure your business runs smoothly and remains financially sound. So, if you’re not already keeping track of those miles, it’s time to start!
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