Going into tax season unprepared can be a dreadful feeling. Freelancers, entrepreneurs, and gig workers all need to pay close attention to their money coming in and money going out. Not only do you need to set around 30% of your income aside, you should also be looking for tax deductions throughout the year to ease the burden of paying taxes.
One self-employment tax deduction for many workers in this category is tracking and writing off miles driven in your vehicle. In order to effectively track your mileage, you can take advantage of one of the many mileage trackers out there.
In this article, we’re going to look at several different mileage tracking apps that you can choose from. Each mileage tracker will have its own unique selling points, so it will be up to you to decide which one is best for you.
Why Should You Track Your Miles?
If you’re driving for Uber or Lyft, tracking your miles is a necessity. If you don’t track your miles, you’ll miss out on huge savings opportunities and will be hit hard once tax season rolls around.
To give you an idea, the IRS mileage rate allows you to deduct $0.545 per mile driven against your income. This means that if you drive 100 miles on the job, you can deduct $54.50 from your gross income. You’ll then only be required to pay taxes on the reduced income amount.
By effectively tracking your miles, you’ll stay one step ahead of the game and can win next tax season. The problem is that it’s easy to just say you drove X number of miles. Unfortunately, the IRS won’t accept that answer. You’ll need to account for every mile driven with an approved method.
That’s where mileage trackers come in to save the day.
What Should You Look for in a Mileage Tracker App?
The best mileage trackers will help you easily account for every mile driven. On top of that, they’ll offer additional functionalities like integrations, expense tracking, and thorough reporting.
First and foremost, your IRS compliant mileage app should have automatic mileage tracking and allow you to differentiate between personal and business miles. You’ll need to classify each trip in your mileage log since the IRS won’t let you count your personal miles toward your tax deduction.
Being able to integrate with your accounting and finance software is also a huge bonus. Delivering reports and data to your accounting software right from your mobile app will make your life so much easier. Apps that enable you to track business expenses and revenue receive bonus points in our book.
Taking pictures of receipts, adding fuel consumption data, and tracking vehicle maintenance expenses in your app will also keep your tax deductions organized. Some apps may even be primarily geared towards rideshare driving which is perfect if you’re an Uber or Lyft driver.
Now that you have an idea of what to look for, let’s go through some of the best apps for accurate mileage tracking.
MileIQ
MileIQ is Microsoft’s version of a mileage tracker. The app automatically tracks your mileage and allows you to easily classify personal and business trips. You simply need to swipe left or right to categorize every trip you take. It also provides detailed reporting that’s sent to your desktop to maintain organization throughout the year. You can even get MileIQ unlimited for free if you have an Office 365 Business Premium subscription.
Pricing
- Basic: Free
- Unlimited paid monthly: $5.99 per month
- Unlimited paid annually: $4.99 per month
Download
Hurdlr
Hurdlr was made with gig workers, realtors, hosts, and freelancers in mind. Not only will the app track your mileage, you can also add your income streams, expenses, and all other deductions into the same app. This includes related auto expenses like auto insurance, fuel consumption, and maintenance costs. By combining all of these financial details, you can get a high-level view of your overall profitability for the year.
Pricing
- Basic: Free
- Premium paid monthly: $7.99 per month
- Premium paid annually: $4.99 per month
Download
QuickBooks Self-Employed
QuickBooks Self-Employed is one of the go-to accounting solutions for many entrepreneurs and gig workers. It’s a household name for good reason. You can track your yearly expenses, income, and taxes all in one place. One aspect of the accounting software is its mileage tracker. The QuickBooks mileage tracker lets you automatically or manually track trips while on the job. This information will be integrated into your QuickBooks software where you can easily access it when tax season rolls around.
Pricing
- Self-Employed: $5 per month
- Self-Employed Tax Bundle: $12 per month
- Self-Employed Live Tax Bundle: $17 per month
Download
TripLog
TripLog has a leg up on the competition when it comes to ways you can track your mileage. Most of its adversaries offer mileage tracking only within the app. TripLog allows you to track your mileage via Bluetooth, iBeacon, plug-and-go auto tracking, manual tracking, your vehicle’s odometer, your Apple Watch, or your Android Wear. On top of that, the app can be fully integrated with your SAP Concur or QuickBooks account to keep everything organized and in one place.
Pricing
- Basic: Free
- Professional: $4 per month or $40 per year
- Professional Plus: $6 per month or $60 per year
Download
Everlance
Everlance is another mileage tracker that automatically tracks your mileage and lets you easily distinguish personal and business trips by swiping left or right. The interface is clean and easy to use and allows you to create customized reports that you can download. The ease of use and simplicity makes it one of the most popular options on the market. The app also enables you to integrate with FreshBooks and Xero.
Pricing
- Basic: Free
- Premium paid monthly: $8 per month
- Premium paid annually: $5 per month
Download
SherpaShare
SherpaShare is the mileage tracker built specifically for rideshare drivers. What makes this app unique among competitors is that it’s much more than just a mileage tracker. Sure you can track your personal and business mileage and expenses, but you can also use its smart driver tools to help maximize your earnings.
SherpaShare will provide you with a heat map that you can use to find the most profitable areas in town. It will also guide you down the best routes while you’re driving. You can track your hourly revenue and profit, as well as chat with fellow drivers to learn from them while on the clock.
Pricing
- Basic paid monthly: $5.99 per month
- Basic paid annually: $4.99 per month
- Super Premium paid annually: $10 per month
Download
Rydar
Similar to SherpaShare, Rydar was made for rideshare and delivery drivers. Rydar calls itself the “ultimate assistant” to both of these types of gig workers. The mileage tracking aspect of the app will automatically log your miles by recognizing when you have passengers in your vehicle.
Not only does Rydar allow you to save money via tax deductions, it also allows you to maximize earnings while on the clock. The app will guide you to areas of high traffic and high earnings potential, as well as tell you when busy events are on the horizon. You can also track all expenses and revenue through the app.
Pricing
- Basic: Free
- Premium paid monthly: $8.99 per month
- Premium paid annually: $4.99 per month
Download
Save Money on Your Tax Return
Since you’re an independent contractor, it’s crucial that you stay on top of your tax deductions over the course of the year. This is especially true for rideshare and delivery drivers when it comes to your mileage deduction.
If this is your first year filing taxes as a gig worker, we have several excellent resources to help you when filing. To start, read through our guide to filing taxes as an independent contractor. Then make your way to our 20 tax write-off ideas, and check out these six write-offs for gig workers.
As long as you keep your mileage tax deductions in mind, you’re going to be completely prepared without a worry in the world when tax time rolls around.
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