In today’s high-tech world, the pain and tedium of keeping a manual log can be a thing of the past.
There are several different mileage tracking devices on the market that can help with the mileage
logging process, but as each business is different, and every driver’s habits unique, there is no
one tracker that is right for everyone.
Some tools, like the mileage tracking apps, have huge hidden costs that most people never consider,
while other devices have a bunch of fancy features most people don’t need and will never use
(but you will pay for). The trick is to understand the pros & cons of each type and how it
relates to your unique mileage logging needs.
As you read through this article, our goal is to help you think about your mileage deduction
in a new way so you can compare the different mileage trackers from an educated
position and get the absolute maximum value from your mileage deduction.
Part 1
So, which mileage tracker for work is right for you?
Don't Go Cheap
What's biggest mistake people make when choosing a mileage tracker?
Failure to invest in the right tools.
In the past, logging miles has been such a pain that most of us cannot imagine the process being
anything but a burden. The result is that we don’t want to spend money on something we feel is an
irritable chore. We want to go cheap. We think “If I am going to buy a tracker, I want the cheapest
thing around because spending money on this process just makes it even more of a burden.” Right?
Huge Mistake.
In reality, logging miles is an opportunity to make a big chunk of extra cash. All you have to do is log
the miles, and your deduction can easily add up to 10 - 20% of your income depending on how much you drive.
The right tool will help you maximize that income while minimizing the burden.
So, think of your mileage deduction as a serious revenue stream where the cash flows out of the government’s
wallet and back into yours. And if your mileage deduction is a revenue stream, you should evaluate your
purchasing decisions the same way you do any other business decision: figure out the ratio of investment
(cost) to profit.
It's an investment
How to think like a successful business person.
Your main consideration when buying a mileage tracker should be:
Which business mileage tracker will put the most money back into my wallet at the end of the year?
Here's what we mean:
Which would you buy?
A $10 tool that’ll make you $100
A $100 tool that’ll make you $1000
The $100 tool is the obvious choice because, while it costs 10x more, it’ll also make you 10x more profit.
More profit is a good thing, right? Yet when it comes to buying a mileage tracker, most people will opt for
the $10 option, unaware that the wrong tool can end up costing them hundreds, even thousands of
dollars, in lost deductions. You know the old adage “You Get What You Pay For”? The point is, a
cheaper tool won’t always save you money.
You need to figure out how much you should spend in order to get the most money back. The only way to
know this is to calculate two things: the true cost of a mileage tracker and your
profit after costs.
Mileage Tracker Accuracy
The most important factor, and most people never think about it!
How much actual cash does your mileage deduction make you?
Your profit after costs
=
Amount your mileage deduction actually makes you
-MINUS-
The TRUE COST of your mileage tracker (see below)
How Much In Your Pocket
Amount your mileage deduction actually makes you.
Do you drive every day, racking up 20,000+ miles a year for business? Or is your travel more sparse,
in the 1,000 mile range? Each driver will have very different needs out of a mileage tracker and should
consider the bottom line of their actual deduction before purchasing a device.
In general, the real dollar value of your deduction is about 25% of the number of business
miles driven (remember, you don’t actually get $0.56 per mile - you get the tax rate you pay on
that money). If you want to get really specific, there is a great
mileage deduction calculator at the bottom of this page that
will help you calculate how much your mileage deduction will actually put in your pocket each year.
Great! Now you know how much you can deduct, right? WRONG!
Mileage Trackers Miss Mileage
This is theoretical - even if it’s what you actually drove!
You still need a log detailing EVERY mile, complete with start and stop addresses, date, and business purpose.
Most “bargain” trackers aren’t fully reliable, missing entire trips and leaving a ton of work for the filer to
complete to have a compliant log. Here the TRUE COST of your mileage tracker needs to be
considered.
Do the math
The true cost of a mileage tracker
This simple equation shows that the actual cost of your tracker is only a small part of the total.
We'll go into these details in parts 2 and 3.
Price of Tracker
+
Missed Deductions
from the tracker missing miles
+
Labor Involved
An example of how the wrong mileage tracker can cost you.
If your tracker misses only 10 miles every two days (which many of them do
- especially apps), you are losing out on over $900 of your deduction
every year. Going cheap, in this case, costs you big time!
Maximize Your Mileage Deduction
The real secret to maximizing your mileage deduction
How most people miss out on their mileage deduction, and the secret to avoiding it.
The only way the miles you calculated above can become reality is if you have a log for every
single mile and
you are crazy if you don’t get a tool that will log everything, and we mean SINGLE FOOT,
for you automatically!
This point cannot be over-stated.
Get a mileage tracker that never misses a thing.
These mileage trackers really do exist. In our opinion, The Mileage Ace is
the best mileage mileage tracker around, and one of the very
few that actually log every foot you drive.
Every foot counts. We know this sounds extreme and obsessive, but it isn’t crazy talk. Here’s why…
The true cost of your mileage tracker doesn’t have anything to do with how many miles you drive.
What MATTERS is how many miles you MISS!
If your mileage tracker doesn’t start logging until you are a few hundred feet away from where you
started, or until you hit 10mph, the lost miles add up fast and
you are missing a substantial amount of your mileage deduction!
If you must login or turn your tracker on and off every time you log a trip, you will inevitably
forget and miss entire trips -
missing a substantial amount of your mileage deduction!
If you must carry your tracker in and out of your car because you need to upload the device, or it is a
multi-functioning piece of tech, like a phone, you will inevitably forget to return it to your car and miss
entire trips - missing a substantial amount of your mileage deduction!
The best way to maximize your mileage deduction...
...is to get a dedicated GPS mileage tracker device that stays permanently in your car and
works no matter what. You should be able to forget it’s there for a month or longer, and
still have every single trip logged perfectly.
Continue to: The hidden costs of mileage tracking apps
Learn why you shouldn't be fooled by the 'low cost' of mileage tracking apps.
