Tracking mileage can be a pain in the neck but did you know that each mile you track equals $.56 off your taxable income for 2014. It will be $.575 for 2015. Sure $.575 does not seem like much but look at this breakdown.

10 miles = $5.75

100 miles = $57.50

1,000 miles = $575.00

10,000 miles = $5,750.00

30,000 miles = $17,250.00

Did you know an active real estate agent can put 20,000-30,000 miles on their vehicle each year? If you drove and tracked 20,000 miles that would be $11,500.00 off your taxable income. $11,500.00 is a huge tax deduction! It makes it worth the trouble of tracking that mileage daily and accurately.

Some tips for more easily tracking those miles…

1. Set an Alarm. When you set an appointment on your calendar to meet a client also set a reminder for the time you will be getting in your vehicle reminding you to track your mileage.
2. Find an app for your smartphone that will track mileage for you. There are several out there. Click here for a site that has some recommendations.
3. Take a picture of your odometer in the Evernote app and save it. The entry is dated. Be sure to take a picture at the beginning and end of the day. Set some reminders to help you get in the habit.
4. Keep a notebook in your car to keep your mileage records. Again set reminders on your phone to help you get in the habit.
5. Write your mileage on the calendar entry for each of your appointments or at the very least list the locations you will be driving to for the appointment. Then you can go back and figure the mileage later.

Find what works best for you and do it. Be sure to document client names, locations and purpose for the mileage driven.

You want to keep as much of the money you work so hard to earn as possible. Don’t give it away to the government to spend as they please.

Recordkeeping is a must when it comes to the mileage deduction. If you happen to be audited you will have to supply accurate, timely records or the entire deduction will be excluded. There are many who learned this the hard way. Here are some excerpts from the IRS website for recordkeeping:

You cannot deduct amounts that you approximate or estimate.

You should keep adequate records to prove your expenses or have sufficient evidence that will support your own statement. You must generally prepare a written record for it to be considered adequate. This is because written evidence is more reliable than oral evidence alone. However, if you prepare a record on a computer, it is considered an adequate record.

What Are Adequate Records?

You should keep the proof you need in an account book, diary, log, statement of expense, trip sheets, or similar record. You should also keep documentary evidence that, together with your record, will support each element of an expense.

Documentary evidence.   You generally must have documentary evidence, such as receipts, canceled checks, or bills, to support your expenses.

For more information: http://www.irs.gov/publications/p463/ch05.html

IRS rules for mileage deduction according to http://www.irs.gov/pub/irs-pdf/p463.pdf :

You cannot use the standard mileage rate if you:

Use five or more cars at the same time (such as in fleet operations),

Claimed a depreciation deduction for the car using any method other than straight line, for example, MACRS (as discussed later under Depreciation Deduction),

Claimed a section 179 deduction (discussed later) on the car,

Claimed the special depreciation allowance on the car,

Claimed actual car expenses after 1997 for a car you leased…

Talk to your tax accountant for more specifics about the mileage deduction and the accurate, detailed records required.