Last updated: February 2, 2024
When it comes to staying on top of your tax returns as a self-employed person or a small business owner, keeping adequate records of your mileage is paramount. Stock advisors and accountants the world over know that advising their clients about how to follow the IRS’s requirements is a crucial component of this.
On this page, we delve into the various ways you can create and keep mileage records for tax, odometer readings, and more. It’s also important to keep in mind that the IRS may change its mileage rate from year to year so a mileage tracker app like MileageWise can help you stay updated with the most recent changes. This is crucial to ensure accurate deduction claims. For instance, the IRS mileage rate 2023 was 65.5 cent, while it is now 67 cent in 2024.
With an intuitive interface, MileageWise provides a mileage log example for IRS purposes that can serve as a blueprint for users looking to document their travel accurately.
What are the IRS Mileage Log Requirements?
First and foremost, we must cover the basic requirements held by the IRS. The below stipulations must be met for the log-in question to be considered an adequate record. Let’s take a look:
- Each business trip’s mileage
- The total miles driven for the calendar year
- Each trip’s time (a date would suffice), location/destination
- Each trip’s purpose (personal vs. business-related)
- Year-end and start-of-year odometer readings
For most, the above is all you need to submit to the IRS, or – in the case of mileage reimbursement – your employer.
In other words, if you use the IRS’s 2024 standard mileage rate of 67 cents per business mile driven, then all you need are the above details and a mileage log to go with them to grab your write-offs or tax deductions.
Some people do use the actual expenses method too, and in that case, you will need to provide the IRS with itemized receipts that detail vehicle-related expenses that could be either fixed or variable, i.e. gas prices or registration fees. Check one of our other posts on the topic for more information on the actual expenses method.
For those in search of a sample IRS mileage log or a mileage form for taxes, MileageWise presents a clear and compliant framework that simplifies this often tedious process. Its system is designed to generate a printable mileage log for taxes, which is incredibly convenient for users who prefer a tangible record or need a hard copy for their tax files.
How to Keep a Mileage Record
Now that we’ve established the IRS’s requirements, let’s examine the various ways one can keep a mileage log, covering some basic options but also drawing attention to tracking apps like our own – a mileage tracker app and web dashboard feature which we’ve designed purely with meeting the IRS’s expectations in mind.
- A Mileage Log Template for Excel: Some people just prefer to input their trips manually. Look, we get it – find MileageWise’s free downloadable Excel mileage log template
- A Google Sheets Mileage Log Template: Another mileage tracker that falls outside of the realm of apps could be simply using Google Sheets – many people do and we have also created a free downloadable Google Sheets mileage log template for you.
- MileageWise’s Mileage Tracking App: With more features than anything currently available on the market, we’ve developed our own mileage tracker app to compete with the best. Featuring three auto-tracking settings and a built-in IRS auditor feature, which checks and corrects any inconsistencies in your log – you can rely on our app.
- IRS mileage log example: if you would like to see an example of how your IRS-Proof log should look, please take a look at the example below:
Combine flexible customer service, the ability to backtrack your mileage via reconstructive technology, and our mileage log tax preparation service, and you’ve got a nice ticket to guaranteeing efficient mileage tax logging.
Should I record my personal trips?
Although the IRS doesn’t require personal trips in your mileage log, it’s strongly recommended that you include them because it will provide clarity for both yourself and the IRS, since you need to separate your total business mileage, total personal mileage, and total commuting mileage for the year.
Also, logging your personal trips boosts the proficiency of MileageWise’s built-in IRS auditor function, which you need for an IRS-Proof result.
What Counts as Deductible Mileage?
A lot of mileage can be considered as mileage for business purposes. Naturally, only business-related trips are valid for deductible mileage, though luckily, the category itself incorporates a lot of things.
Let’s examine further:
- Business errands – for example when you go somewhere to get work-related supplies
- Trips to meet clients or business associates to conduct work-related activities – It is important to note that you can’t just meet a colleague for a drink after work and call it a business trip, but indeed many accountants offer business tips about how to approach various meetings with tax deductibles in mind.
- Business lunches – for example with a client, supplier, or associate discussing work matters
- Mileage you do as part of your working day after your commute – If you need to buy more gas during work hours, this would legitimately be considered business-related mileage, though not if you work from a home office.
- Trips between branches and/or the various offices of your employer
About Mileage Reimbursement
Wherever people are concerned with a mileage log, mileage reimbursement is another end of the conversation that bears consideration.
Increasing Mileage Reimbursement Rates From 2022 to 2024
Moving on from 2022, the IRS had first updated the 2023 mileage reimbursement rate to 65.5 cents per mile for business-related driving, offering a slight increase to account for the rising costs of vehicle operation, including fuel, maintenance, and vehicle depreciation.
This adjustment ensured that businesses and individuals could accurately calculate and claim deductions for vehicle expenses on their tax returns. Please note that if you are just preparing your mileage log, you’d still need to use the 2023 rates for last years trips. You can take advantage of our free calculator here.
For medical or moving purposes, the 2023 mileage reimbursement rate was set at 22 cents per mile, providing a standardized figure for calculating deductible expenses in these categories.
Meanwhile, the rate for charitable driving remained at 14 cents per mile, underscoring the IRS’s commitment to encouraging philanthropic activities. These rates are crucial for tax planning and compliance, offering a clear guideline for documenting vehicle expenses throughout the year.
Generally speaking, the deductible mileage outlined above also applies to employees for reimbursement purposes, but where fleet vehicles are involved, things might be different.
This is because where fleet management is concerned, employees usually drive a company car and therefore have to pay attention to slightly different things – namely reduced cost-per-mile rates outside of the standard mileage rate of 67 cents per mile driven (the new rates set for 2024). This is because an employer covers fixed costs and sometimes even some variables too – which leads us to our next subtopic.
Ways to Deduct Miles
There are essentially two ways to approach deductions for your IRS mileage log or company-based mileage record: the standard mileage rate and the actual expenses method.
The Standard Mileage Rate
With this method, things are simple. All one needs to do is follow the above requirements – preferably with a mileage logging app that saves the user time and money – use the 67 cent rate and presto!
Let’s fire off an example just to help further elucidate the matter:
James is a criminal defense attorney, representing a wide variety of clients, some of whom are from prison in faraway places, he does a lot of mileage. Fighting for equitable justice in an unjust world isn’t easy – James has got to do those miles. To keep things simple he uses the standard mileage rate.
By the end of this year, James will have done 41,000 miles, which means that he will qualify for $27,470 in tax returns. Naturally, James uses MileageWise – he’s only one of many clients currently optimizing their deductibles by creating IRS-proof mileage logs in just seven minutes per month! Yes – that’s right – seven minutes.
The Actual Expenses Method
As we mentioned previously, things are a little different with this method. You will need those itemized receipts, but you’ll still need a log too.
Straight into Freshbooks
If you’re a Freshbooks user, the good news is that Mileage Wise offers you seamless integration. Once you’ve printed your IRS-Proof log, you can seamlessly import it into your FreshBooks account in PDF format. Once imported, they will be automatically transformed into entries in the Expenses tab of FreshBooks. Each entry will include an attached PDF document along with a note providing a summary of the expense information.
Penalties for Non-Compliance
Non-compliance can lead to significant financial and legal consequences. If your mileage log does not meet IRS requirements, you may face penalties such as fines and the disallowance of mileage-related deductions. In an audit, the IRS may scrutinize your records, and if they find inaccuracies, omissions, or insufficient documentation, you could be subject to additional taxes, interest, and even penalties for negligence or substantial understatement of income.
Furthermore, non-compliance may trigger further IRS scrutiny, potentially leading to a more extensive audit of your financial records. Therefore, it is crucial to maintain a meticulously accurate and IRS-compliant mileage log to avoid these costly repercussions and ensure your tax deductions are legitimate and defensible in the event of an audit.
Try MileageWise for 14 days Completely Free
Having now covered the requirements necessary for an IRS-compliant mileage log, we want to extend our hand once more.
Keeping accurate mileage records and creating mileage logs for taxes is easy with our app and its accompanying web dashboard, and honestly, there’s no reason why you shouldn’t try it for free today.
Don’t forget that MileageWise also offers an IRS mileage log template that you can customize to your specific needs. It’s basically an example of a mileage for the IRS. This template streamlines the process and can be easily modified, saving you time and effort. You can access this free IRS mileage log template in the web dashboard and you view a sample here.
If you’d like to give MileageWise a whirl, you needn’t give us your credit card details nor commit to a longer plan; just download the full version for 14 days and get a feel for our tech.
We’re confident you won’t be disappointed! 🙂
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Average Possible Business Mileage Deduction
Imports Trips and locations from Google Timeline
Produces IRS-Proof Mileage Logs
Creates Retrospective Mileage Logs
AI Wizard Technology for Mileage Recovery
|Sampling / Recurring Daily Trips
|Mass Distance Calculation
|Built-In IRS Auditor for 70 Logical Conflicts Correction
|Mileage Tracker App
|Vehicle Expense Tracker
|Manual Trip Recording
|Bluetooth Auto Tracking - with no hardware needed
|Plug'N'Go Auto Tracking
|Vehicle Movement Monitoring
|Battery and Data Friendly
|Other Software Integrations
|Trip List Import
from other Mileage Trackers
|Trip List Import
|Shared Dashboard for Teams
Features are all related to mileage tracking
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