If you have employees that drive as a part of their job, there’s a good chance they track their mileage. Whether for a reimbursement or a tax deduction, tracking mileage to substantiate the business use of a vehicle is an essential part of the job. And to keep track of miles driven, you need some kind of a mileage log.
In Everything You Need to Know about Mileage Logs in the 21st Century, we’ll address important questions:
- Why do my employees need a mileage log?
- What’s the best kind of mileage log to use?
- What pitfalls do I need to avoid when it comes to mileage logs?
- Is GPS mileage tracking an invasion of employee privacy?
- How do I make sure my company complies with IRS business mileage rules?
If you’re not sure whether this guide is for you and your organization, consider two very important points:
- Effective mileage capture is crucial if you employ people who drive for their jobs.
- The type of mileage log you use matters more than you might think.
Let’s unpack these two topics and explore the kinds of helpful information our guide to mileage logs will provide. It’s amazing how much more there is to recording mileage than just entering numbers in an Excel spreadsheet.
Why you need a mileage log in the first place
If any employees drive on behalf of your company, you probably offset their vehicle costs in some way. If the company pays a mileage reimbursement, then it’s a no-brainer that your employees will be recording and submitting their mileage. But that’s not the only system that requires a mileage log.
If you want to pay a non-taxable car allowance, then you need to substantiate business use, and the easiest way to do that is a mileage log. The same goes if the company wants to deduct its car allowance payments as a business expense.
If you reimburse fuel or provide a fuel card, you need to substantiate business use, or else that expenditure is treated as taxable income. Similarly, if you provide a company vehicle, you need to substantiate business use, and again, the easiest way to do it is by tracking mileage.
In Everything You Need to Know about Mileage Logs, we’ll explain the IRS rules for substantiating business use of a vehicle. We’ll also equip you with helpful information on what constitutes an IRS-acceptable mileage log so you can make sure your current system is compliant.
Why the type of mileage log matters
Mileage logs have a lengthy history, starting as paper log books before transitioning to electronic spreadsheets, expense systems, and mobile apps.
When evaluating your system of mileage capture, you need to consider four factors:
- Timeliness – Does the log accurately reflect recent or contemporaneous travel, or does it reflect later estimates? This distinction is crucial not only for tax purposes but also to protect your organization’s bottom line.
- Human error – Does the log place the control of reported mileage in the employee’s hands or in the organization’s? Self-reported mileage tends to be prone to errors and estimates. Even a modern expense system can involve some level of self-reporting.
- Efficiency – Does the log demand significant time to calculate and report mileage? The more time employees must spend manually entering information, the more likely they will take shortcuts leading to errors, and the less time they have to carry out productive activities.
- Visibility – Does the log give a window into an employee’s work habits? Most people are more productive when they must work in full view of their supervisor. But when it comes to the latest mileage tracking apps, protecting privacy is a significant concern.
In our guide, we’ll equip you to consider how each type of mileage log available today fits or does not fit with best practices.
Plus, with GPS apps emerging as the go-to mileage tracking approach, our guide will provide you with extensive information about
- How GPS mileage apps work
- How employers can use GPS while protecting employee privacy
- Ways GPS III will shape the future of mileage logs
- Ways mileage apps can increase CRM adoption by employees
To learn more about mileage capture in the 21st century and how to use your mileage log to control costs, improve employee productivity, and comply with IRS regulations, take a few minutes to read Everything You Need to Know about Mileage Logs in the 21st Century.