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.
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?
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.
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?
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.
How much actual cash does your mileage deduction make you?
Your profit after costs
Amount your mileage deduction actually makes you
The TRUE COST of your mileage tracker (see below)
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!
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.
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!
...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.
Learn why you shouldn't be fooled by the 'low cost' of mileage tracking apps.