Please note that the following is meant for informational purposes only and does not qualify as legal or professional advice. If you are seeking professional advice, please speak to one of our CPAs.
In recent years, the surge of Uber and Lyft, along with the rise of contract positions in industries like trucking and transportation, have led many to start filing for mileage reimbursements from the IRS. Because of this increase, however, the IRS has started to become more strict with enforcing mileage guidelines, meaning you’ll have to be as on top of your mileage as possible. Here are a few things to keep in mind.
Record Every Mile for the Standard Rate
By far, the most important thing you can do is to keep track of your mileage, from the minute you back out of your driveway to the minute you pull back in. If you are doing this manually, the easiest way is to keep a spreadsheet that lists your odometer when you started driving and when you finished, then finding the difference for your mileage for your given task. However, there are now also several free apps that will track your mileage for you.
If you choose this option, for 2018, you can charge $0.545 per mile against your income. As a heads up, for 2019, the charge will be $0.58 per mile against your income.
Keep Every Receipt
If you prefer to keep track of your expenses as they accumulate, please make sure you keep all of your receipts and that you document the date, amount, place, and the business purpose of expense. Ideally, you should have a separate credit card from the one you use for personal expenses to better make a distinction between the two. In any case, though, it is always a smart idea to keep your receipts in case anything comes up with the IRS.
Even though the IRS has begun to more rigorously examine deduction claims for mileage, you can still get a healthy return for such travel. The best way to avoid penalties and to ensure you receive your full deduction, then, is to record and keep every mile and every receipt you accumulate during your work.
If you still have questions, you can speak to one of McAuley & Crandall’s experienced CPAs for further information at 913-239-9130.