Business owners know we should be keeping a mileage log when we drive for business. Your tax preparer may have told you about the tax benefits of logging your mileage, but it’s such a hassle. As a small business owner myself, I know the last thing on my mind when getting in the car is writing down my starting mileage in a log book. If I manage to write down my starting mileage murphy’s law makes sure I forget to write down the ending mileage.
In this day and age where we carry miniature computers (smartphones) in our pockets and our cars give us turn by turn directions there must be a better way.
There is a better way.
I started 2015 by installing MileIQ on my smartphone. MileIQ bills itself as “The smart mileage tracker”. It’s totally living up to that promise. The app runs in the background and intelligently records all my trips using GPS. When I open the app it shows me all the places I've driven and I can quickly swipe to classify each trip as business or personal. To make things easier it shows a small map of the starting and ending location. I can give frequently visited locations a custom name to make identification even easier. As of March 3rd I’ve recorded over $640 worth of tax deducible business driving for the year. The app estimates I’ll finish 2015 with over $3,500 of deductible mileage.
The app tracks up to 40 trips per month for free. I went through 40 trips in about a week, so I opted to upgrade to the monthly plan which allows unlimited trips. It costs $5.99 per month which works out to $71.88 per year. So for me, it will cost about 3% of the tax deduction they estimate I’ll earn during the year. Sign me up.
Won’t constantly using GPS drain my battery quickly?
It would, but MileIQ doesn’t constantly use the GPS. It uses low power background tracking that is likely to be enabled already by other apps native to your phone. With this advanced location tracking the battery drain is minimal. Generally, it's less than 1% different per hour than not having the app installed. In my personal experience I didn't notice any obvious decline in my battery life.
Because of the low power way it tracks the mileage there are occasionally trips recorded that don’t make sense at first glance. For example often when I go to my PO Box it shows a 10 mile trip that starts and ends at my office. Since I’m only in the post office for a minute or two the app doesn’t realize I stopped. This is actually very useful because if it was too sensitive for short stops it might consider a long stoplight as a separate trip. Now that I'm aware and expect the behavior for short stops it’s much easier to classify the trips correctly.
As I gear up to file my 2014 taxes I wish I’d known about this app sooner! I'm not getting compensated to write this, but I am very much looking forward to emailing my tax professional my complete MileIQ log of tax deductible trips this time next year.