The Internal Revenue Service (IRS) announces guidelines each year for in relation to mileage use for businesses. The idea of keeping track of business mileage seems complicated but for the most part, it can be done with a few steps. Adequate record keeping helps you in reporting mileage as a business deduction for tax purposes. The business mile rate through the IRS allows for mileage used to be deducted if your employer doesn’t reimburse you for using your own vehicle for business-related trips. This also applies if your employer does offer reimbursement but not at the rate of the IRS.

This deduction is also common for small business owners who use their vehicle for business-related purposes. There are 2 methods that can be used in claiming the expense:
• Standard mileage rate- you deduct a specific amount driven along with other business-related driving fees including tolls and parking.
• Actual expense- you deduct every business related expense that was tracked for the year.
The actual expense method may be more beneficial at tax time if you have a newer vehicle you only use for business. This method also lets depreciation be deducted. The standard rate would apply when you use a vehicle during the first year of your business. There are certain rules in using the standard mileage rate method if you claim depreciation.

If your vehicle is used for personal and business purposes, you’ll have to keep track of when you use it for business purposes. Keeping track of business mileage includes recording miles used in a journal or notebook. Each time you use your vehicle, record the numbers on you odometer and the reason for which you are using the vehicle. Record the reading on the odometer when you leave and upon returning. Recording why the trip was made may need to be submitted to the IRS to ensure the trip was business related. Obtain all expense receipts related including gas purchases and auto repairs.

Some find it easier to keep data on a spreadsheet. Recording information in note book is helpful but a spreadsheet allows you to have an electronic record and makes it easy to transfer data. The spreadsheet will allow you to enter a formula to help you calculate your reimbursement.

If you forget to record actual mileage during your trip, you can add the address information on an online map website to get an estimate of miles for that trip. Recording mileage for personal trips may make your tax return fraudulent.

Alex is a financial journalist and writer. He loves writing about personal finance and spends most of his days writing about mortgages, credit cards and whether it is sensible to take out a payday loan .