Happy New Year and welcome to the beginning of 2017!
The New Year always brings a flurry of resolutions and unfortunately, a majority of those resolutions fall by the wayside after a matter of days or weeks.
So what if I told you that I have a New Year’s resolution that is easy to stick to, can save you some money, and most importantly will appease your CPA?
This resolution I speak of is to start properly tracking your mileage for the year!
I will give you a moment for your excitement to subside….
When it comes to tracking mileage, tax season always looks the same for most people. Going back through your calendar trying to piece together your various drives and then try to figure out the mileage using Google Maps. This process can be frustrating and you most likely promise yourself that you’re going to start writing your miles down every day so you don’t have to do this again next year.
Well it is a new year and now is the time to make 2017 the year that you actually start tracking your mileage consistently and correctly.
In order to be compliant with IRS requirements, your mileage tracking log must include:
- the mileage you drove,
- the dates of each trip,
- the places you drove
- the business purpose of the trip.
When tracking mileage for a tax deduction you’re required to keep contemporaneous records of your business driving. This means that you need to create the records shortly after driving the miles.
When estimating your miles at the end of the year, rather than tracking mileage as you go, it’s likely that you’ll forget about a substantial number of miles and end up leaving quite a bit of money on the table.
For example, when attempting to retrace mileage from your calendar, did you remember to include that trip you took in February to your CPA? What about the drive you took in September to purchase more printer paper for the office printer? The 2017 business mileage rate set by the IRS is 53.5 cents per mile, so even a few miles here and there could potentially add up to a good chunk of money
Obviously, waiting until tax time to start tracking mileage is not a very good practice. Tracking mileage as you go is a far better solution. At the very least, get into the habit of writing down each and every trip you make into a paper mileage log. However, that can get pretty cumbersome, especially when you’re in hurry or trying to multitask. If you prefer to be more tech savvy, you can use your smartphone to download a mileage tracking app to automate this process and ensure you track every single drive and get the most out of your tax deduction.
Beginning on Jan. 1, 2017, the standard mileage rates for the use of a car (also vans, pickups or panel trucks) will be:
- 53.5 cents per mile for business miles driven
- 17 cents per mile driven for medical or moving purposes
- 14 cents per mile driven in service of charitable organizations
If you have any questions please feel free to call me at 541-342-5161 or email me at mguiley@islercpa.com