Mileage Tracking: What Qualifies and What Does Not

Andrew Luce, CPA •

So by now you’ve likely heard that you need to track your business mileage from your tax preparer but have been resistant to start tracking your mileage because it’s too time consuming or you’re just not aware of the rules. If time is your issue than I will admit up front I cannot help you. However, if you are not aware of the rules than I can help! The following information will help you understand what qualifies for business use vs. personal use and I’ve also include information on what type of information you’ll want to document to retain in your tax records. 
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Step 1, know what qualifies for business use vs. personal use. The following is a quick summary for you to follow when considering which miles are deductible or not:

1. Mileage between your home to your regular or main job is never deductible
2. Mileage between your home and your second job is never deductible
3. Mileage between your home and a temporary work location is deductible if you have a regular or main job at another location.
4. Mileage between a temporary work location and your regular or main job is always deductible.
5. Mileage between a temporary work location and your second job is always deductible.
6. Mileage between your regular or main job and your second job is always deductible.

Please note I’ve used some key words above including home, regular or main job, temporary work location, and second job which all have specific definitions by the IRS which can be found in Publication 463. The IRS has also has an easy to follow chart to show what’s deductible and what’s not deductible in Publication 463.

Step 2, now that you know what is deductible and what is not deductible the next step is to know what documentation/information you are required to retain to support your vehicle deduction. The IRS will require you to support your standard mileage deduction by documenting the following information:

1. the date of travel
2. the destination (city, town, or area),
3. the business purpose (for example picking up supplies from a vendor, making deposits at the bank, lunch with a prospective customer, etc.)
4. the number of miles driven

Please note if you’re looking for a specific format to track your miles the IRS an example daily business mileage and expense log in Publication 463. Also, there seems to be an app for everything which includes apps for tracking business miles – I recommend doing your research to find the app that works best for you. If you need help picking an app consider Mile IQ or TripLog – please check out our blog for more information about these apps!

Also, it’s important to note that the IRS reimburses mileage at a rate of 58 cents cents for every mile in 2019 which is up from 54.5 cents in 2018. As a result, the standard mileage deduction can add up quickly which is why it’s important that you retain the appropriate support for this deduction.

This is a quick summary but there is always other information you will want to consider that I recommend you consult with your CPA. The other factors you’ll want to consider when deducting the cost of your vehicle include consideration of using the standard mileage rate deduction vs. actual cost deduction and whether or not you have five or more cars that are used for business among other things.

If you have any questions, feel free to contact me directly.
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