Why Is Mileage Tracking Important For a Tax Deduction ?

Why is mileage tracking important for tax deduction? First, this article will discuss why mileage tracking is crucial for tax purposes. We’ll also look at TCJA, which eliminates the deduction for unreimbursed employee expenses. Finally, we’ll discuss how to keep your records up to date. If you’re like most people, you might have used a manual mileage log in the past. But these days, with the help of an App, you can automatically log your trips and keep a running total.

Why mileage tracking is essential for a tax deduction

If you’re self-employed, one of the best ways to maximize your tax deduction is by tracking your business mileage. Traditionally, keeping a mileage log involved using a notebook in your vehicle. Every time you take a business trip, you’d record how many miles you traveled. Then, you would add up your miles at the end of the year. But now, thanks to technology, mileage tracking has become easy and convenient. Smartphone applications can even track your mileage automatically and calculate the amount you can claim on your taxes.

Another benefit to mileage tracking is that it helps you keep track of business and personal trips. The IRS doesn’t care about ballpark figures as long as you keep your records up-to-date. In addition, the IRS can tell the difference between a business trip and a personal one if you keep accurate records. Finally, mileage tracking apps like offers are more convenient than the old school system of keeping a pen, odometer, and receipts.

TCJA eliminates the deduction for unreimbursed employee expenses

The new tax law eliminates deductions for unreimbursed employee expenses (UEEs). Such expenses are paid by employees for work-related reasons and do not result in a taxable income. For example, UEEs may include union dues, education, meals, entertainment, and travel. Moreover, the tax law does not cover these expenses if employees pay for them. However, the deduction can still be claimed for certain employees, such as construction workers.

Under the new tax law, employees can no longer claim unreimbursed employee expenses as miscellaneous itemized deductions. However, they can still claim mileage expenses if they total more than 7.5 percent of adjusted gross income. Besides removing the deduction for unreimbursed employee expenses, the new tax law also changed mileage deductions. For example, the mileage deduction for employee mileage can only be used if the mileage incurred is related to work-related business travel.

Apps that automatically log trips

You should consider using an app that automatically logs trips. This can help you keep track of your expenses, including gas and tolls, and prepare your tax reports. The best mileage tracker apps will automatically upload receipts and mileage data for record-keeping purposes. These apps can also help you keep track of your expenses, like parking, tolls, and fuel expenses. And because they automatically log your trips, you won’t have to worry about chasing down receipts for every trip.

For a tax deduction, an app that automatically logs trips is essential. MileIQ automatically logs your route while in your car, including start and stop times. In addition, it records other relevant data that the IRS requires for business mileage deduction. Moreover, MileIQ allows you to classify your drives as personal or business. More than one million people use this app. Flynn, which bills itself as the world’s first AI tax engine, is another app that can help you keep track of your expenses.

Keeping records up-to-date

The IRS will review your deductions when you don’t have all the necessary documentation to back them up. If your records are not up to date, you may be subject to penalties and revoked deductions. To avoid this, keep all your forms up-to-date and organized. For business owners, this means storing receipts electronically and supporting them with the business for as long as possible.

It’s essential to keep your records up-to-date, especially those related to expenses. You should keep your receipts, canceled checks, mileage logs, tracking expenditures, and bank statements. In addition, keep records related to potential tax credits, such as insurance or credit card statements. It’s also helpful to keep two sources of proof: receipts from business and personal expenses and invoices for home improvements.