Starting a business means learning all the different ways that records need to be kept and all the various things that can be tracked and deductions that can be claimed on one’s taxes. Some of these may seem so elementary, but in actuality, it helps to know the basics so you can keep the right information in the right format to make things easier for your accountant (or yourself). Here’s a basic primer on keeping track of business mileage:
You may find a record-keeping book specifically made for tracking mileage at your office supply store–or you may find a notebook or journal to do just fine. I like to keep track of all my information in one place, but I’ve known others who keep track of their mileage in their car and then transfer the information to a ledger, spread sheet or other form.
For a complete mileage record, you will need to track the following:
1. The destination
2. The purpose of the trip
3. The speedometer reading at the start of the trip.
4. The speedometer reading at the stop/end of the trip.
5. The total miles from start to stop
6. The job or work category (if you are keeping track)
If you make several stops or errands in one trip, or mix in business with home errands, it can make things more complicated. Just try to lump things together (or break them out if that makes record-keeping easier) and be as accurate and truthful as possible. If you do some work for your home business, and also work for clients, customers or jobs who reimburse mileage, you’ll really need to be very accurate in your records.
Some people choose to keep one long record for an entire year, while others will keep records by month. It will help you to chat with your accountant to see what he or she prefers, or figure out what works best for you in your own record-keeping. It may take a little trial and error to find a system that you can work with and that makes your business accounting and mileage tracking run smoothly.