How To Make The Most Of Your Business’s Mileage Tax Deductions
Grab a cup of coffee because we're going to talk about taxes and the importance of a GPS tracking software solution to automate logging mileage.
Business owners and fleet managers in the telco, pest and lawn, logistics industries, or in any type of business where you deploy a mobile workforce know that the miles stack up quickly. Come tax time the big question will be whether or not those miles will translate into potential tax deductions at 53.5 cents per mile.
Here are three tips to make sure your tax returns reflect all that time your vehicles spent on the road.
- Estimates aren’t good enough!
In order to be compliant when submitting a claim for transportation expenses the IRS requires at tax time not only a record of your mileage, but the dates of your business trips, the places you drove for business, and the business purpose for your trips.
- Separate business, personal, and commuting
Most of the time fleet vehicles will be traveling to and from business/customer locations. But sometimes drivers take company vehicles home with them. That homeward bound journey, for however many techs the situation applies to, wracks up the miles. If a tech uses the company car for a non-approved job, a side gig maybe, that’s even more miles. It’s also likely drivers make an occasional stop at a coffee shop or burger joint, sometimes having to go a fair distance out of the way. The point is that the IRS wants to know which trips were business-related and which weren’t. As the person responsible for the fleet, and/or profits and loss, being unable to provide appropriate documentation means not maximizing on your tax return. (Not to mention sacrificing wear and tear to your vehicles for drivers who are using them for illicit profit. With mileage tracking, categorization is key. For good asset management, GPS tracking is key.
- Automate your mileage tracking and fleet management
Tracking mileage manually is tedious and time-consuming, not to mention being prone to human error. But cloud-based, automated fleet management tools will provide for a streamlined, IRS-compliant process by calculating and categorizing mileage for each trip. When using mobi.Locate you simply install a small GPS tracking device and it records each stop/start address, distance, duration and more. After that, generating IRS mileage tax deduction reports will be a snap!