One way to reduce your tax bill is to track your mileage. Let’s go over what mileage tracking is and why you may want to start doing it.
What Is Mileage Tracking?
Most often, mileage tracking refers to keeping a mileage log for reimbursement or for tax deductions. For 2018, your business miles are worth 54.5 cents per mile. Many employers also require a mileage log when paying out a mileage reimbursement.
What Counts As Deductible Mileage?
The IRS lets you deduct mileage for business, charity, moving and medical purposes. The IRS considers the following business drives:
- Customer visits
- Trips between offices
- Drives for errands and supplies
- Customer meals and entertainment
- Trips to the airport for business travel
- Traveling between temporary job locations
It’s important to note the IRS doesn’t let you deduct your commute. The IRS considers where you live a personal choice, so driving to work is not deductible.
How Much Are Your Miles Worth?
Your business drives are worth 54.5 cents per mile in 2018. Here’s how that rate has changed over time:
|Year||Rate per Mile||Dates Covered|
|2019||58 cents||1/01/19 - 12/31/19|
|2018||54.5 cents||1/01/18 - 12/31/18|
|2017||53.5 cents||1/01/17 - 12/31/17|
|2016||54 cents||1/01/16 - 12/31/16|
|2015||57.5 cents||1/01/15 - 12/31/15|
|2014||56 cents||1/01/14 - 12/31/14|
|2013||56 cents||1/01/13 - 12/31/13|
|2012||55.5 cents||1/01/12 - 12/31/12|
|2011||55.5 cents||7/01/11 - 12/31/11|
|2011||51 cents||1/01/11 - 6/30/11|
|2010||50 cents||1/01/10 - 12/31/10|
How To Track Your Business Mileage
The IRS requires you to have documentation of your miles. You can use a mileage log template, a handwritten log or a mileage-tracking app like MileIQ. Millions of people rely on MileIQ because it provides automatic mileage tracking. This means you can focus on your business while making sure you’re getting the largest deduction for your mileage.
MileIQ’s blog does not constitute professional tax advice. You should contact your own tax professional to discuss your situation.