Keeping track of mileage for tax deduction

Keeping track of mileage for tax deduction

For many fleet companies, keeping track of business mileage for tax deduction is a very effective solution for tax relief. This, alone, makes mileage logging an important tool for fleet owners or fleet managers who seek ways of reducing costs. Besides, in the event of an IRS audit, an accurate mileage report can save the day for your fleet business.

Unfortunately, many fleet businesses still rely on outdated logbooks or spreadsheet software that require a lot of manual work. Suffice it to say, these old-fashioned methods may put your business at risk, as the possibility of inaccurate calculations becomes very real. 

To keep your mileage records spot-on and tidy, going digital seems to be the optimal — if not the only — choice. And how are you going to do that? Using a smart vehicle management software solution, of course. Keep reading to find out how the IoT and fleet Telematics can help you streamline your mileage tracking and logging. 

Mileage logging, back in the day

For decades, a paper logbook was the only means to keep track of mileage for tax deduction. Fleet managers had to write down detailed entries for every mile driven, through a complex process, involving heaps of paperwork; not only for each fleet vehicle, but also for each trip. Needless to say, this way of calculating mileage was also prone to errors and omissions. 

An improvement came later on, with the introduction of spreadsheet software for personal computers. However, even spreadsheets are a lost cause in front of human mistakes; occasionally, system failure as well — especially when mileage records were not backed up somewhere, for business continuity. 

However, the digital age came and with it, Telematics and vehicle management software. At last, tracking and recording mileage for tax deduction is easier than ever before.

Veturilo: Taking control of your fleet’s mileage for tax deduction, once and for all

Veturilo comes with integrated smart tools that make tracking and recording mileage for tax deduction a child’s play. With Veturilo, you get precise records of your fleet vehicles’ trips and routes; along with other vital information that will help you optimize your management

In any case, Veturilo allows you to export IRS-compliant mileage records and relevant trip data for your fleet business. Once you start using the trip log feature, you can export a detailed mileage log in the form of a spreadsheet; again, for every vehicle and each trip. 

Afterward, to figure out your company’s tax-deductible trips, just fill in the rate per mile; alternatively, you can email the file to your accountant, to do it for you. For your information, the standard mileage rate for 2021 has been set to 56 cents per mile. 

How to track and keep records of your mileage for tax deduction with Veturilo

As mentioned, when you claim tax deductions for your fleet company, keeping accurate, detailed mileage records is key. But why is this so important? 

In short, if your business lacks the proper records and documentation — especially in case of an IRS audit, well, you’re in for it. That’s why you must be able to produce precise and timely records on mileage for tax deduction. Also, you must be able to prove the business purpose for every trip-related expense; that is, whether you use the standard mileage or the actual expenses method for tax deduction. 

In this regard, the trip log feature in Veturilo will prove to be an invaluable tool for your fleet business. To make the most of your mileage for tax deduction, the Veturilo app keeps your logging up to date with the following:

  • Date of trip
  • Starting location and destination
  • Trip purpose
  • Starting mileage
  • Ending mileage
  • Total of miles driven for the trip

You also have to include expenses that are not automatically recorded, such as:

  • Tolls, and other expenses pertaining to the trip

Mind you, it’s vital that you have a clear record of the above information for every vehicle and trip. What’s more, the IRS requires you to retain your mileage log for at least three years; that is to say, starting from the date on which you filed for a tax return containing your deduction information.

Mileage for tax deduction: Key takeaways

An effective way to save money on your fleet business’s tax bill, is to record your mileage for tax deductions. In order to validate your tax deduction, the IRS requires detailed mileage records for every vehicle and trip; as well as proof of the business purpose of the trips — e.g. an invoice to a client or verified partner, at the destination address. If you face an audit, without verifiable records, your business could be on the hook for a significant tax penalty. 

As you already know, tracking and recording mileage is a demanding, time-consuming job; especially for a fleet business. Luckily, Fleet Telematics and Veturilo are here to help you come off this task with great success; not to mention, save valuable time to focus on other important tasks. Using the trip log feature in your Veturilo app, tracking and recording mileage for tax deduction becomes easy as pie.
Just remember, you need to include as much information as you can, for every vehicle and trip; namely, the date and purpose of the trip, starting point and destination, and the mileage covered. That’s it, no hitch there, it really is that easy with Veturilo! But, don’t take our word for it! Why not try it out, and see for yourself?

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