Let’s talk about how to track mileage for business using Mile IQ. But first, it’s confession time. You need to know that we’re rule-followers. To. The. Max. So much so that Amy actually wore her retainer (almost every day) when she got her braces off in high school, and Jordan was notorious as a little kid for taking blame when someone else did something wrong. Neither one of us liked to get into trouble as kids, and not much has changed as adults — especially when it comes to the IRS! — which brings us to today’s post: how to track mileage for business… without really having to keep track of anything!
As creative entrepreneurs, we’re always on the move. Can we get an amen? We go from one place to the next so fast that — by the end of the day — we forget where we’ve even been! Some of it’s personal, like a trip to get groceries. Some of it’s business, like a client meeting or wedding day. But it’s all a lot to keep track of and remember!
With all the combinations of personal and business drives, tracking mileage and keeping it all straight gets to be close to impossible — which is just awful, because then you’re stuck with either a) losing money by not tracking mileage at all, or b) tracking it wrong and risking a red flag on an audit. So, what’s the solution? Is there a solution? Fortunately, there is!
We’re rule-followers. To. The. Max.
Your comment about the trip doesn’t need to be a complete sentence or even have punctuation, so don’t give it much thought, just use our system: what + who + where. It’s al little bit like the board game Clue, right? Amy and Jordan with the candlestick in the library!
Here’s a real-life example: client meeting with amy taylor at starbucks. That’s it! We write it in that order because it takes longer to write names with apostrophes and capitalization on phones like: Amy Taylor’s Client Meeting at Starbucks. That might be a little too Type-A for you, but we’re all about being as fast and efficient as possible with everything we do, because the seconds add up!
Here’s a quick word of caution, though: make sure to swipe your drives every night or whenever you’re just sitting around killing time. If you wait until the end of the month, you WILL forget some of the places you went, and then you’ll be searching through your iCal (like we were!) trying to remember.
At the end of the month, Mile IQ will email you a report in either Excel or PDF with a list of your personal and business drives (we just do business) dated, time-stamped, with all of your comments, the number of miles and — here’s the best part! — the value of the drives all totaled up for the month. Cue confetti! No math involved!
Right now, the IRS says that every mile you drive is worth 57.5 cents. So, if you drove one hundred miles for business in a month, the value of the drive would be $57.50. But what do you do with that number once you have it? Well, there are a few options! And, like Olmec from Legends of the Hidden Temple always says, the choice is yours and yours alone. Also, let us preface this by saying that we’re neither accountants nor tax attorneys (Jordan dropped out of law school after about seven weeks!), so we’re just sharing what we do, so, like those horrible prescription drug commercials at halftime of football games, consult with a professional before use! Especially since everyone’s tax-filing situations are different, our way might not be the best way for you. Taking a deduction at the end of the year, instead, might put more money back in your pocket when your taxes are filed, said, and done.
With that in mind, since our business is an LLC S-Corp, for legal and tax reasons, we’re both employees of Amy and Jordan Photography. For mileage purposes, it means this: every time we drive our personal vehicle somewhere for business, our employer, Amy and Jordan Photography, is legally allowed to reimburse us for up to 57.5 cents per mile. Commutes don’t count, though. It’s just for jobs that require you to drive your personal vehicle above and beyond your daily commute, which for us is currently the kitchen table to the coffee maker most days, at least until the mail comes! (Jordan LOVES getting the mail! Walking to the mailbox is one of the biggest thrills of his work day. Anyone else out there?) What’s nice is that the money isn’t included as taxable income since it’s a reimbursement, just like if we bought something on our personal debit card on accident on Amazon (because we didn’t look at the card number) when it was actually for business. No big deal! We’d just write a check from our business account to us to fill that hole.
Long story short, friends, if you don’t have it yet, get Mile IQ! It’s only $5 per month (or one latte!) and WELL worth it! Because, if there’s one thing we’ve learned about being small business owners, our time is money, and there’s a limited amount of the first, so anything that saves us time AND makes us money is something we’re interested in! Our only regret about this app is that we didn’t get it sooner.
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