Whether you are a contractor, a business owner, or an employee who drives for work, you may need to track mileage for taxes. Here is a guide to the best ways to keep track of mileage for taxes.
When to track mileage for business
There are several reasons a person might keep track of mileage. The two main reasons are tax deductions and mileage reimbursements. Either way, the rules for keeping track of business miles are the same. But it is important to know who is responsible for mileage tracking in each situation.
Mileage tracking for tax deductions
Business owners and independent contractors may track mileage for tax deductions. They will use the IRS standard business rate for the tax year to determine their deduction. It is as simple as multiplying total business mileage for the year by the IRS mileage rate. For 2025 that rate is 70 cents per mile. The total deduction is entered as a business expense on Schedule C.
Mileage tracking for cents-per-mile
Employees cannot deduct mileage on tax returns. However, employees may need to keep track of mileage for reimbursement purposes. In this case, typically the employer will provide an IRS-approved form or software for recording mileage. Employees receive a cents-per-mile rate, and these payments are tax-deductible business expenses for the employer.
How to record mileage for taxes
If you need to record mileage for taxes, there are several ways to do this. The key is to use an IRS-approved method for logging mileage. This log proves the business use of the vehicle and makes the mileage deductible.
IRS mileage log requirements
To keep an approved record of business trips, a log needs to be timely (not created more than three months after a trip). More precisely, it should include the following information:
- Date, destination, and purpose for each trip
- Miles driven for each trip
- Total annual business miles
- Total annual miles for the vehicle
Logbook mileage sheet
The oldest method is to keep a paper mileage sheet. Very few people use this method anymore, especially since most people file their taxes electronically.
Mileage tracking spreadsheet
Perhaps the most common method for individuals is to set up a spreadsheet. Using Excel or Google Sheets, you can create columns for each of the four categories (date, destination, purpose, miles driven). Then you can use a simple SUM formula to add up all the miles. Some businesses still use this approach, but it can get tedious if you travel a lot.
Mobile apps for mileage
Many businesses and now some individuals have switched to using a mobile app. There are various apps on the market, but the most powerful ones use GPS mileage tracking to automate the process. The app then connects to an online dashboard that makes all calculations and delivers reports that can be used for tax purposes.
The best way to track mileage for taxes
The easiest way to track mileage is a mobile app designed for that purpose. The more often you drive for work, the more tedious it becomes to log trips in a spreadsheet. If you travel to multiple places in a given week, the logging gets even more complicated.
GPS mileage tracking apps
With a GPS mileage app, you can press "play" to start tracking and "stop" when you arrive at your destination. Or, if you do most of your business driving within certain regular timeframes you can automate it. Apps like mLog allow you to set work hours, and all driving during that time is automatically recorded.
CRM mileage tracking
If your business uses CRM software, you may be able to get a mileage tracker that integrates with that software. This can make recording trip details even easier. This is a particularly good fit for businesses that track mileage for reimbursements or to prove business use of a vehicle.
Try our guide to choosing the best mileage tracking software.
What mileage counts as deductible?
Keep in mind that not all mileage that appears to be business mileage counts for tax purposes. Here are some distinctions:
Commuter mileage
The IRS does not treat commuter mileage as tax deductible. If you are a business owner or contractor and drive regularly to the same location as your base, then that drive counts as a commute. However, if you drive from that location to other business-related locations, that drive counts as a business trip.
If you work from home or use your vehicle as your office, then all trips to various business-related locations can count as business mileage.