1
PROCRASTINATION
Issue: Creating a mileage log with an outdated tool like Excel or a poorly chosen mileage tracker app is a burden. It’s no wonder that people often avoid completing their mileage log for months, or right up until the IRS comes knocking on their door. While trying to create their mileage log, especially without proficient software, one can easily miss obvious logical conflicts and contradictions, that even a beginner IRS auditor would detect. Unfortunately, there’s really no turning back at that point.
Solution: Choose an easy-to-use mileage log software (a combo of a web dashboard and a mileage tracker app) that makes mileage logging a breeze. If you need to reconstruct your mileage log retrospectively, the program should warn you about logical conflicts in your document before printing, so you don’t have to manually check the finished product before you file it with the IRS.
2
BEING OUT OF DATE
Issue: Especially in the case of reconstructing a mileage log retrospectively, it’s important to monitor the legal requirements, fuel prices, and the deductible costs applicable in that time period. In addition, you should pay attention to your client list for the year you are preparing your mileage log for. You really have to pay attention to every little detail while creating a mileage log retrospectively. Even under normal circumstances, you need to be very careful about what you file.
Solution: Your mileage log software has to store standard mileage rates for past years and a knowledge base that is up-to-date with the legislation of each time period you are preparing your mileage log for. Lastly, let’s not forget about the importance of a client database that can be configured to your user preference.
3
SOLELY RELYING ON THE C.P.A. TO FIGURE IT OUT
Issue: “It’s their job!” – this phrase often leads to the creation of insufficient mileage logs. Mileage logs put together in an Excel spreadsheet at the last minute, rushed, lacking proper data, and created by an unmotivated accountant – often without the required professional expertise or experience – are very easy to spot. In many instances, the mileage logs are practically nonexistent until you finally hire a professional accountant or an IRS audit takes place during which the deficiencies will be revealed and you will get fined.
Solution: Everyone has to create their own mileage log, or at least track their mileage in an ongoing manner with a mileage tracker app. This way you will have a list of logged trips, which can be a good base when a professional creates your IRS-Proof mileage log for you if you choose to hand the task of mileage log creation to a professional team.
4
TRACKING EXPENSES THE WRONG WAY
Issue: It’s hard to keep track of all of your vehicle-related expenses, such as refueling and oil changes. For a lot of people keeping every piece of documentation (e.g. receipts) is key when it comes to mileage tax deductions, but finding a sustainable way to store them is easier said than done, especially if you’ve chosen the wrong way to do it.
Solution: You’re able to track, list & upload your vehicle-related expenses in MileageWise’s vehicle expense tracker in the Web Dashboard platform. These expenses will be displayed in a separate section on your IRS-Proof mileage log. This solution will soon be available in MileageWise’s mobile app as well.
5
MISSING IRS MILEAGE LOG REQUIREMENTS
Issue: You don’t create your mileage log in a contemporaneous manner and don’t specify the start and end date or the purpose of your daily trips. While it might not sound like a big deal, the IRS tends not to accept such mileage logs.
Solution: A mileage log dashboard and app that requires dates, trip purposes, and other IRS mileage log requirements and stores them as well. MileageWise has both solutions and its built-in IRS auditor feature checks & corrects 70 logical contradictions before letting you print your mileage log.
6
MANUAL CALCULATION OF DISTANCES
Issue: Aren’t you tired of manually calculating client distances and rounding off the number of miles you’ve driven? You know the struggle then. It takes so much time to create a mileage log with this method. Using Google Maps for this purpose isn’t much better either, as you never know if the distance shown there is accurate or not.
Solution: Use a mileage log web dashboard and mileage tracker app combo that has a built-in map with a mass distance calculator, that can calculate door-to-door distances between any two points in the USA with 100 feet accuracy.
7
100% BUSINESS USE
Tempting to do, but too suspicious during an audit. There are cases where you can explain why you have claimed 100% business mileage. The issue here is that everyone knows that it is almost impossible to achieve this ratio. IRS auditors spot false business use claims quicker than a blink of an eye.
Solution: Let’s not play with the odds, the industry average – 80% – is also a decent ratio at the end of the day. But if you choose to claim 100% the most important thing to have is an undeniably accurate mileage log!
8
NOT KNOWING WHAT YOU’RE ELIGIBLE TO DO
Issue: Not knowing what to log and how to log it is a very common mistake. For example, you can deduct every single business-related mile, or the fact that you may not claim commutes or trips that you have already been reimbursed for. Travel between offices, running errands or picking up supplies, drives to the airport for business purposes, customer visits, and trips to temporary job sites are examples of such overlooked deduction opportunities. If you’re between two jobs, the miles that you drive to find a new job are also deductible as long as it is within your field of occupation.
Solution: Choose a mileage log web dashboard and mileage app smart enough to detect the purpose of your trips automatically and offer proper auto-classification.
9
NOT FIXING TRIP GAPS
Issue: Some people tend to file incomplete mileage logs, hoping that the IRS won’t spot the inconsistency and trip gaps in the log. However, if the numbers don’t add up, someone’s gonna have to explain that to the IRS.
Solution: MileageWise’s AI-powered AdWise Wizard fills in these trip gaps in your mileage log based on your data & driving habits. Note that this data may come from many sources, including MileageWise’s own Google Timeline import function.
10
WHAT MILES ARE DEDUCTIBLE?
The issue is pretty simple here: the miles you drove for business purposes. The trick is to have your recorded data in sync with the required data. For example, your daily mileage and number of locations visited should correspond with and realistically reflect your working hours. Visiting 10-12 customers a day for a pizza delivery boy is a suspiciously low number, however, it’s an alarmingly high number for a service technician. You also have to be aware of which business mileage deduction basis to base your calculations on – the standard mileage rate or the actual expense method.
Solution: Obtain a mileage log web dashboard and a mileage tracker app that keeps these correlations in sync.
