Tax write-offs made easy

Apps that track mileage have numerous benefits, both for drivers and employers. From having accurate data with minimal work, to peace of mind with IRS-compliant reports, let’s explore the details next.

It’s accurate

Accuracy is the core benefit of the best mileage tracker apps. If it doesn’t accurately reflect how many miles were actually driven, mileage tracking isn’t very useful to anyone (but it’s not as common as you would hope).

What does accuracy mean for the self-employed?

With an app that tracks mileage reliably, self-employed individuals can feel confident you have complete and accurate records of your business miles. When it comes time to file your taxes, you’ll be ready to maximize your tax deductions and minimize your tax bill, or even get a refund. 

What does accuracy mean for companies?

Employers that are using business mileage tracking apps also have clean records of miles driven for IRS compliance. 

If employees are driving company cars, companies can accurately calculate the amount of any taxable fringe benefit, as well as verify mileage compared to fuel spend. If employees are driving personal vehicles and getting reimbursed, the company and employees can both feel certain that they're reimbursing actual business miles, not more or less. 

The other data that gets captured with mileage tracking apps, like start and stop times and destinations, can also be useful for business insights, like how much time is spent driving and what are the most frequently visited locations.

It saves time

Even mileage tracking apps with a manual component can cut down on the time spent on mileage reports because drivers don’t have to write down the details of every trip. Some apps are also able to automatically classify trips as personal or work-related depending on the route, further cutting time spent tracking and managing mileage.

How do self-employed individuals save time?

Some apps have manual tracking options, while other mileage tracking apps offer automatic tracking as well as different customizable features that cut down on work. Both save time because they eliminate the task of calculating each trip’s mileage and writing it down, along with recording the trip date and location. The app does all of that with great accuracy.

As a result, you can fully focus on your work instead of wasting time on things like tracking mileage or worrying about whether all data has been recorded correctly.

How do companies save time?

A mileage tracker app is much easier to set up and manage than manual logs. Yes, it might take some brief training and getting used to how the app works, but in the long run, both managers and drivers save time on mileage reporting and approvals. 

Besides that, it will save time for employees on the road time the same way it does for self-employed individuals – by eliminating the need to manually record mileage. Even if employees only spent 15 minutes a day tracking mileage without an app, that adds up to over an hour a week and 5 hours a month!

It saves money

Even though paper or digital manual logs are the lowest cost way to track miles, mileage tracker apps are a more affordable option than physical devices. And if they capture mileage more accurately, they'll turn out to be bigger money savers, easily justifying any cost for the app.

How do the self-employed save money?

Self-employed indivuals who track miles through an app will have an easier time come tax season because the app will have recorded your business miles all year long, not missing any the way a manual system likely would. You can confidently claim your full mileage deduction, which means saving money by paying less in taxes or getting a bigger refund.

In 2023, every mileage driven for work is worth an all-time high of 65.5 cents in tax deductions. So every additional 100 miles a mileage tracking app captures translates to reducing your taxable income by a whopping $6,550!

Beyond mileage deductions, some apps can also help track and identify other potential tax deductions, further lowering your tax burden.

How do companies save money?

Similarly, the most direct way for companies to save money is by reducing their tax burden on employee reimbursements. If mileage logs are used to substantiate the amount that a company pays employees for driving their personal vehicle for work, that reimbursement is not taxable for the company or the employee. Both save money!

In addition, time is money, and that’s most apparent when employees are paid for their time. Saving them time, as described above, can lead to direct savings.

Finally, businesses who start using a mileage tracking app typically see 10-35% mileage reimbursement savings. With an accurate app, there is no doubt that the company is paying exactly what they should in mileage reimbursements - for all of the actual miles that employees drove for work, but not anything more from mileage that may was rounded up, inflated or submitted for reimbursement when it shouldn’t have.

It keeps you stress-free and organized

Mileage trackers, especially automatic ones, can make a driver’s life a lot easier. They start and stop tracking based on vehicle movement, they automatically log the mileage and they securely store it in the cloud. No more worrying about forgetting to track miles or losing records.

What does it mean for self-employed individuals?

Come tax time, your mileage logs are already organized and ready to submit to your accountant, or for your own reference. If you do get audited by the IRS, you have the documentation you need to backup your mileage deduction, also ready and organized. It’s complete peace of mind.

What does it mean for companies?

Mileage tracking and reporting can be one less thing companies have to worry about. And just like for the self-employed, they’re already prepared in case of an IS audit.

In addition, some apps offer advanced classification and tagging options, so you can easily account for mileage spend and allocate it to the right cost centers.