4 Quick Hacks for Tracking Your Vehicle Mileage For Taxes
If you drive for a living, whether as a rideshare driver or a delivery driver through Instacart, DoorDash, and the like, it’s a good idea (essential, really) to track the mileage you put on your vehicle each day. Since you use your vehicle for purposes other than work you will need a way to separate your business miles from your personal, so below are four quick ways to track your vehicle mileage for taxes.
Why Track Mileage For Taxes?
Before we cover tracking vehicle mileage for taxes let’s go over why you might want to track mileage in the first place. The more you drive your vehicle the more miles you add to the odometer. As mileage increases so will the requirements for maintenance, repairs, and gas to refuel the tank. The cost for all that comes from your own pocket, but since you’re using your vehicle for work purposes you can earn some of the money back by lowering your taxable income and thus taxes owed.
What Kind Of Miles Can You Track?
You can only track the miles you drove for business purposes. These include delivery runs, collecting and delivering riders, driving to the store to pick up groceries you then deliver, etc. It does not include your commute to a workplace.
Method 1: Use Your Fuel Efficiency
This method is usually used by those who can’t rely on their odometer. It’s an excellent way to estimate your mileage, but it isn’t entirely accurate. Let’s say you have a gas tank capacity of 17.1 gallons, and your vehicle gets 27 miles to the gallon. If you multiply 17.1 by 27 and drive until you reach a quarter of a tank, you can estimate that you drove 346 miles using the above figures, having used 75% of your fuel. We don’t recommend this method for business or tax purposes – this would be a method to employ for your own personal curiosities or when making a decision to use one vehicle over another in your business.
Method 2: Keep Track On Paper
This is an “old-school” method, but it still works. All you have to do is make two columns on paper, one for start mileage and one for stop mileage. When you start driving for your business each day, you write down the mileage on your odometer and then simply repeat the process when you end the drive. If you use your vehicle for non-work related purposes that day in between work-related purposes, you will want to add stop/start records between the drives to differentiate between personal and business miles.
Method 3: Spreadsheets Are Easier
If you don’t want to keep track of miles with pen and paper, or have handwriting that can be hard to read, creating a spreadsheet to track your daily mileage is a quick and easy method. One downside for both pen/paper and spreadsheets is that you have to manually record each of your business trips, which is time-consuming and leaves room for error.
Method 4: Mileage Tracking App
These days there are apps for everything from tracking air quality, looking at the weather forecast, creating cleaning lists that keep track of how long it’s been since you mopped your bathroom, and quite literally thousands more. There are even mileage tracking apps that make it easy for tracking vehicle mileage for taxes. If you’re worried about subscriptions or paying for an app that you might not like, there are several free ones such as Stride, TripLog (basic), and a few others.
Taurus CPA Solutions is a full service tax, accounting, and consulting firm. If you’re looking for a dependable, quality CPA to help you with your taxes, you can always reach out to us.