In order to claim business use of a vehicle, you need to utilize either the Standard mileage rate method or the Actual expenses method. You may have a larger tax benefit of one or the other, so it’s a good idea to calculate both if you qualify to use either and get to choose. Further, many small businesses use the same vehicle for personal and business uses, so mileage should be tracked to calculate the tax-deductible use of the vehicle. For any tax benefit, you have to have sufficient evidence to support the deduction: enter mileage tracking!
The standard mileage rate is updated by the government each year. QuickBooks automatically applies the standard mileage rate by default 1.
QuickBooks desktop 2023 allows you to enter multiple vehicles and track mileage for them separately. You can also mark if the mileage is billable to your customer and/or reimbursable to an employee.
Trips can be manually added, or setup for approval (which then automatically adds the trip once approved).
The QuickBooks Desktop mobile app for IOS can be used with iPhones or iPads to track mileage on the go. As of now, there is not currently an app for Android.
Admin users can track mileage in QuickBooks Online. Open the QuickBooks Online mobile app (for either Android or IOS) and keep it open during your trip, it will detect and track mileage as you drive. Schedule a time to then review and categorize your mileage as Business or Personal (from the app or a web browser).
If you’re not using QuickBooks, still make sure you’re tracking your business mileage! There are a multitude of free mileage tracking apps, use a paper mileage log that you keep in the car, or write down your mileage at the end of each day using Google Maps to look up the mileage for where you drove.Whichever option you use, be consistent! Make sure to record your odometer reading on at least the first day of the year so you know total mileage throughout the year (and use your log for business mileage).
You are able to override the standard mileage rate in QuickBooks if you use a different amount. Any amount that differs from the standard mileage rate may have an effect on your taxes.