The IRS allows you to deduct your car mileage on trips used for business. That includes driving from your home office to your Virtual Office to pick up mail, or to a supply store to purchase printer cartridges for your home office (also tax deductible). Make sure to take advantage of it.
To do so, you need to be meticulous about keeping a log of all business-related trips, with starting and ending trip mileage and purpose of the trip. That can be quite a tedious spreadsheet routine. Fortunately, there are easy apps that do this for you.
Many of us at CloudVO use MileIQ, but there are other options like SherpaShare, TripLog, Hurdlr, and Everlance. See more details on how they compare on Bench.
One of the reasons we selected MileIQ is the lower cost at $60 annually (also tax deductible!). The app resides on your smartphone and asks you to swipe left if the trip was of a personal nature or right if it was business-related. So easy! The app tracks your mileage accurately via your phone’s GPS. Our own CEO, Laurent Dhollande, testifies: “As one person who used to document all my business trips on a spreadsheet, I can tell you that MileIQ saves me a considerable amount of time.”
Another benefit is that it is much more accurate than the manual spreadsheet. The IRS requires you to keep a “contemporaneous” mileage log. That means you need to capture your trips in the log the minute or the day you take them and not at the end of the month. With the app, all you need to remember is to enter your beginning and year-end mileage, and periodically swipe left for personal and right for business trips on MileIQ.
One other CloudVO user says that she typically does this once a week when the app reminds her to do so. “I can remember with absolute certainty which trip was for what purpose when the app shows me the beginning and the ending point of my monthly trips. But I could not remember the actual mileage with certainty after a few days, or would forget business-related trips when I used a manual process. Now the app ensures nothing is forgotten, with great accuracy.”