Did you know the IRS allows you to write off business miles on taxes?
This means if your employees often travel using their vehicles for business purposes, it is considered a business expense. This translates into potentially saving thousands of dollars worth of mileage deductions every year!
Do you want to claim these business mileage deductions for your business too?
If yes, the IRS requires you to track and provide proof of mileage spends in the form of mileage logs. Businesses can also use these records to calculate tax returns and justify deductions. This ensures your business stays audit-ready in case of IRS scrutiny.
Taxes are no fun - everybody agrees. To quote a great man...
The best way to track and report business miles for taxes, without question, is by using a mileage tracker app. This article discusses the benefits of using one and reviews top mileage tracking apps for 2023.
Let’s dive right in!
Why should businesses use a mileage and expense tracking app?
All working professionals need to keep track of business expenses for reimbursements or taxes. Take, for instance, sales professionals. Once finished with client meetings, they have to save all related expenses till it's time to fyle reimbursements. Then, they spend an entire Sunday afternoon manually sifting through hoards of receipts and stitching them into compliant reports. There is no escaping this if they want the money they might have spent from their pockets for work reimbursed.
As is the case with any detail-oriented and labor-intensive task, manual errors in expense reports could stir up trouble with tax authorities. Nobody wants that.
An efficient mileage tracking app automates the entire process with little manual intervention, helping both employees and businesses stay on top of their finances. Also, an automated expense management software can:
- Seamlessly facilitate mileage and expense reimbursements
- Enable easy and well-documented tax deductions
- Provide real-time insight into business and travel expenses
- Enable Finance teams with a centralized dashboard to get expense insights
- Eliminate the chance for fraudulent or overstated expenses and costly mistakes
Automated mileage and expense tracking software also help eliminate non-compliant or fraudulent claims, keeping businesses in an audit-ready state at all times. In fact, they can help reduce reimbursement cycles by up to 5x.
We’ve reviewed the best mileage and expense tracker apps to use in 2023 to help you make the right choice for your business.
SUGGESTED READ: Policy considerations for mileage reimbursements
Top mileage and expense tracking apps in 2023
Fyle’s mileage tracker is powered by Google Maps. You simply have to enter your start, stop, and end location, and the system will automatically calculate distance and cost based on differential mileage rates set by Finance. In addition, the app allows employees to duplicate or automate a recurring mileage expense submission in case employees use the same route (ex: home to office and back) repeatedly.
Further, Fyle makes it easier for your employees to log multi-stop mileage expenses spanning multiple stops in a given day. When an employee adds an additional stop in the mileage form, Fyle also automatically calculates the distance and amount for easy and quick submissions.
Fyle is ideal for businesses that want to automate mileage tracking and the entire expense management process. It helps companies manage all employee-initiated expenses, corporate credit card spend and claim reimbursements. It also integrates with major accounting software like QuickBooks, NetSuite, Sage Intacct, and Xero, automating pre-accounting end-to-end.
Stride is a free app that automatically logs every mile you drive and generates a tax compliant report to ease your tax-filing process. It is an excellent choice for solopreneurs or independent contractors looking for a simple app to track their business expenses.
Not only does it prepare IRS-compliant reports of mileage and other deductions, but it also offers expert support on identifying tax-saving opportunities.
TripLog is a good choice for SMBs with remote or traveling employees and self-employed individuals for keeping tabs on mileage and other expenses. In addition, its many features help business owners cut down on administrative work.
Its key features include automatic mileage tracking, route planning, frequent trip rules, and tax-compliant data reporting. It also can track personal and business mileage separately, which is extremely useful for traveling employees.
Hurdlr is the app of choice for entrepreneurs, independent contractors, and rideshare drivers. Alongside automatic tracking of personal and business miles, it has a neat tax estimator that helps you estimate your tax obligations ahead of time.
It also creates tax-compliant mileage and expense reports and reminds you of upcoming tax deadlines, making taxes much easier!
If you’re an individual or SMB who’s only used paper-based systems to track mileages so far, MileIQ is a great app to take things online! Its mobile app runs quietly in the background, automatically collecting accurate logs of miles and classifying them into appropriate categories.
It also allows you to save frequently used routes and automatically compiles accurate reports of weekly and monthly miles traveled. If you’re looking for an app exclusively to track miles, look no further!
This one is exclusively for individuals or businesses that offer taxi, ride-sharing, or delivery services. SherpaShare automatically tracks miles without having to indicate the start and stop for trips manually.
The USP of this app is its Smart Driver Tools, which help drivers identify the best routes and track hourly income and profit. It also offers great deals and discounts on products and services like vehicle insurance and car accessories! Lastly, it helps businesses with the trickiest part - doing your taxes.
Mileage and expense tracking can get very messy very quickly unless you do it right from day zero of the financial year. Therefore, it’s best to delegate the mundane, frustrating, and compliance-riddled expense management-related tasks to someone with nothing better to do - a bot!
We’re sure Einstein would have sincerely appreciated expense management automation if it was a thing in his time. Too bad for him, but great news for us all - taxes are so much simpler with mileage and expense tracking software doing all the heavy lifting!
We’re always looking to add great mileage tracking apps to this list to help our readers make the right choice. If you have used mileage trackers you think everybody should know about, let us know at firstname.lastname@example.org, and we’ll be happy to review them!