The pandemic was difficult, even for those introverts, remote workers, and home-bodies. So as offices and vacation spots opened up, many of us began carefully planning for returning to normal life.
If pre-covid you worked in an office, met with clients, or found yourself frequently on the go for work, they may have been a pleasant break for you. You may have found yourself spending time with your family and even saving some money.
Now that you are hitting the road again, we want to make sure you are aware of the many ways you can still save money. Specifically when it comes to the mileage deduction.
What is the Standard Mileage Rate?
According to the IRS, “The optional standard mileage rates [is] for employees, self-employed individuals, or other taxpayers to use in computing the deductible costs of operating an automobile for business, charitable, medical, or moving expense purposes.”
This means if you frequently drive to clients’ sites, move locations for a job, or drive a distance to contribute to charity, you can calculate the mileage rate and use that as a deduction on your tax return.
Of course, there are some stipulations. For example, if you travel to a client’s office for work and your employer reimburses your mileage then this is not deductible.
Generally speaking, you should be aware of the mileage you incur for these sorts of activities. This is especially true if you have a job where you are frequently on the go, like a real estate agent.
The App Business Owners Swear By: Mileage IQ
Having worked with plenty of business owners to help lower their tax liability, I have a few tools that can help make the process infinitely easier, starting with the Mileage IQ App.
The Mileage IQ app is designed to help you easily calculate how far you drove and how much you are saving with the mileage deduction. The GPS tracking, live features, and quick accurate reports make it easy to submit expense reports to your boss or save them for your accountant.
Without apps like this, many find it a hassle to remember all the places they have been, search for the distance, and calculate the deduction. When compared to the app, you will find yourself saving hours of your time on a regular basis.
Pricing
One of the greatest perks to the app is you do not have to be a frequent driver to use it! The Mile IQ has 2 pricing plans. The first is free for your first 40 drives. This is perfect for the casual “work-on-the-go” traveler. Their second plan is unlimited drives at $59.99/year or $5.99 billed monthly.
Depending on your industry or the current project you are working on, there are plenty of plans that make this a must for your business tool kit.
Is it Worth it?
Sometimes the IRS requires extensive documentation to show you are entitled to various deductions. It can make one wonder whether the hassle is worth the effort.
Apps, like Mile IQ, were designed to make the process significantly easier and only require a few clicks to set up.
It is also worth noting that the IRS recently increased the mileage rates you are allowed to deduct.
So if you have not already begun recording your mileage for 2022, now is an excellent time to begin doing so.
No matter how you feel about hitting the road for work again, consider a few ways to help save you some cash while you are on the go. Tax deductions can be one of the best ways to lower your tax liability but little can be done after the year is over. Which is why now is the time for business owners to take action.
If you are interested in learning more about how to create a plan that decreases your tax liability, schedule a consultation with me today.
Sources:
https://mileiq.com/
https://www.irs.gov/tax-professionals/standard-mileage-rates