What's the best way to track business miles?
Use a mileage tracking app. MileIQ, Everlance, and Hurdlr all run in the background on your phone and log trips automatically using GPS. You just swipe to classify each trip as business or personal. Some are free, some cost a few dollars a month. The cost is irrelevant compared to the deduction you’ll lose without records.
The IRS requires four things for every business trip: the date, the destination, the business purpose, and the miles driven. A mileage app captures the first and last automatically, and the other two take five seconds to add. Trying to reconstruct this from memory in March is how contractors leave thousands of dollars on the table every year.
For tradespeople and contractors who drive between job sites, supply houses, and client meetings all day, the mileage deduction is often one of the largest on the return. At the 2024 standard mileage rate of 67 cents per mile, a contractor driving 25,000 business miles a year is looking at a $16,750 deduction. Miss half those trips because you weren’t tracking and that’s over $8,000 in deductions gone.
Know what counts and what doesn’t. Driving from your home to your first job site is generally commuting and not deductible. But driving from one job site to another job site, from a job site to the supply house, or from your shop to a client meeting all count. If your home is your principal place of business and you have a dedicated home office, the rules shift in your favor and trips from home to job sites can qualify.
You also need to decide between the standard mileage rate and the actual expense method. Standard mileage is simpler. You multiply your business miles by the IRS rate and that’s your deduction. The actual expense method lets you deduct gas, insurance, repairs, registration, depreciation, and other vehicle costs based on the percentage of business use. If you drive a heavy truck with high fuel and maintenance costs, actual expenses often save more. But you need to track all those costs in addition to your miles. A CPA for construction and trade businesses can run both calculations and tell you which method saves more for your situation.
If you use a vehicle 100% for business, tracking is simpler because every mile is deductible. But be honest about this. If you ever drive it to the grocery store or pick up your kids, it’s mixed use and you need to track the split.
The best system is the one you’ll actually use every day. Set up an app, turn on automatic tracking, and spend two minutes at the end of each day classifying your trips. Build this into your routine the same way you check your phone before bed. Pair that habit with solid tax strategy and you’ll capture every mile you’re entitled to instead of guessing at year end and hoping for the best.
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