If you travel for business, you must keep records of your mileage, especially if you are to be reimbursed or use the records on your taxes. This is a substantial expense that is sometimes overlooked by companies, especially startups. If you fail to keep track of this expense, you may not claim a tax deduction, or you may fail to get your money back from the company. Triplog is a mileage tracking app that will help you capture the right mileage.
Have an accurate record of dates and times
When travelling for business, you must record your mileage as soon as you get to your destination or when you get to the office. This will ensure you do not forget the trip, date or event.
Trying to remember your mileage after a month might prove difficult. You are more likely to come with an estimate which may be lower than the actual figure. When you have inadequate records or receipts that do not match the information on your report, it will be difficult to request a tax deduction.
Use a mileage tracking app
This is one of the most accurate ways for you to effectively track your mileage. When you are moving from town to town, it can sometimes be overwhelming to determine the exact distance you covered, especially when you are exhausted. A mileage tracking app will give you the chance to concentrate on your responsibilities without worrying about getting the right mileage when requesting reimbursement for your expenses.
Separate your personal and business mileage
Are you using the same car for your business and personal movement? Some mileage tracking apps will help you separate the personal travel from your business engagements. However, it is also essential for you to have your records. For example, you can have your car’s mileage at the beginning and the end of the year. This is an excellent way of determining if your business expenses yielded high returns or if you need to make adjustments the following year. For example, you may consider changing your routes to make business trips cost-effective.
Avoid using estimates or rounding off figures
This is a common practice in companies that do not have proper records. Individuals who use the same car for business and personal use also tend to haphazardly determine how much of the total mileage was for business and how much was for personal use. For example, if you covered 15,000 miles, estimating that 10,000 miles was for business may cause you problems with the tax body mandated to audit your taxes. Such rounded figures will raise a red flag and cause you tax issues.
Don’t use past records
Some people assume that if they cover the same distance every year, the mileage is the same. However, this is not true. You cannot have the same mileage year after year, even when you follow the same route or cover the same distance.
Your operational costs may change annually. You need to have an accurate record of how much your expenses vary year after year. If the mileage remains the same, you may be inviting a tax audit because the details will be deemed unusual.
Mileage expenses are an integral part of the operating costs in a business. You need to ensure you manage these costs efficiently and that the records you keep are accurate.
