Tracking business mileage is an essential part of managing your small business expenses, especially for those who travel frequently. Keeping track of mileage can help businesses accurately report tax deductions and reimburse employees for business-related travel. There are several effective ways to track mileage but regardless of the method you choose, you will need to be IRS compliant in order to deduct related expenses.

Here’s a quick overview of the importance of mileage tracking and how to do it effectively.

Why track business mileage?

First and foremost, you want to track business mileage because it’s a legitimate business expense. The IRS allows you to deduct business mileage expenses and requires that any business expenses that can be deducted, are deducted (e.g. as with income, you cannot pick and choose which expenses to claim).

Second, by accurately tracking your business miles you can claim a substantial tax deduction, reducing your overall tax burden. And finally, tracking mileage can simplify your record-keeping process, making it easier to prepare your tax return.

The mileage deduction is calculated based on the standard mileage rate set by the IRS each year. For 2024 it is $0.67 per mile; as of this article date the 2025 rates are still pending.

How to track business mileage

Choose a method

There is no particular mileage tracking method that works better than another. What matters is that you’re consistent and accurate regardless of the way you choose to record your business trips.

  • Keep a Mileage Log. This is the traditional method involving a logbook to record your trips for those who prefer to track mileage manually. It is important to keep the logbook up-to-date. Keeping notebook in your vehicle makes this process easier as long as you’re consistent.
  • Use a Mileage Tracking App. This is a digital option that automatically tracks your mileage using your smartphone’s GPS. Some apps are free to use and others require a subscription fee. Popular options include:
    • MileIQ
    • Hurdlr
    • QuickBooks Self-Employed
    • TripLog
    • Everlance

Record essential information

The IRS requires that you track certain information for each trip you claim. This is necessary to prove your business mileage expenses are legitimate. If your business is ever audited, without written, contemporaneous records your mileage deduction will be disallowed which could result in significantly more tax being assessed. Be sure to include the following in your tracking:

  • Date: The date of each business trip.
  • Odometer Reading: The starting and ending mileage readings for each trip as well as beginning and ending year odometer readings.
  • Purpose of Trip: A brief description of the business purpose for the trip.
  • Destination: The specific location of your business destination.

Other tips

  • Begin tracking your mileage from the start of your business operations. Ideally you will snap a photo of your odometer on the first and/or last day of the year in order to have a visual record of total miles driven and then log all business trips throughout the year. This helps further differentiate between personal and business miles.
  • Clearly document the purpose of each trip to avoid potential challenges during an audit.
  • If you combine personal and business trips, separate the business portion of the trip for accurate mileage tracking. Make sure you also understand what commuting miles are and how they apply to you as those miles cannot be deducted for business purposes.
  • Store your records safely. Although it’s possible to recreate a mileage log, doing so would be burdensome and time consuming and could lead to errors or missing information. Have a backup available, either as a physical or digital copy.