The former we have already mentioned on this page it’s very simple – all you need to do is keep a mileage log, then total your business mileage and do the math. Self-employed people and independent contractors can choose between two methods when it comes to claiming tax deductions on their mileage – the standard mileage rate and the actual expenses method. Keeping a Mileage Log While Self-Employed This is a good idea because the IRS could audit you at any point, and they can request logs dating back up to 3 years. How Long Should You Keep Your Tax Records?Īs a rule of thumb, it is usually worth it to keep tax records that date back a long time, though at a minimum you should keep a comprehensive vehicle mileage log dating back at least 3 years. Doing this could be difficult depending on the Excel version you have, though with our mileage logging software you are automatically shown the potential deductions of your logged trips – more on that later.Īlthough 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.Īlso, logging your personal trips boosts the proficiency of MileageWise’s built-in IRS auditor function, which you need for an IRS-Proof result. Potential deduction amounts, although this information is by no means required by the IRS, – using the 2023 standard mileage rate of 65.5 cents per mile for instance – your drives could give you a good idea of just how much you can claim in tax deductions from the IRS.If it doesn’t, or if there are logical conflicts in your trips and readings, you could face a sizable IRS fine. The IRS requires this information so that they can see if your total recorded mileage coincides with odometer readings. Your odometer readings at the very least at the beginning of the year and at the end.
While you’re certainly better off using a mileage tracker app, some people just prefer a more old-fashioned approach using an Excel template.