If you drive for work, knowing how to track business mileage and deduct it can save you thousands on your taxes. In this detailed guide, we’ll show you how to track your miles correctly in 2025, what tools to use, and how to avoid the most common mistakes. Plus, we’ll link you to other helpful resources so you can stay fully informed.
Why You Must Know How to Track Business Mileage and Deduct It
Understanding how to track business mileage and deduct it is key to getting the full benefit you deserve. Every time you drive for business — visiting clients, delivering goods, or attending meetings — you can deduct those miles.
However, the IRS requires:
- The date of the trip
- Where you traveled to and from
- Total miles driven
- The business reason for the trip
Without this proof, you could lose your deduction during an audit. To keep your business finances strong, be sure to also check out our article on https://taxwisecorp.com/blog/.
How to Track Business Mileage and Deduct It Step-by-Step
Let’s dive into exactly how to track business mileage and deduct it:
Step 1: Pick a Tracking Method
There are two ways to track mileage:
- Manual Tracking: Write each trip’s details by hand.
- Mileage Apps: Use apps like MileIQ or Everlance that log your trips automatically.
Pro Tip: Use a free trial of a few apps to see which one you like best.
Step 2: Understand What Qualifies as Business Miles
Miles you can deduct:
- Driving to a client meeting
- Traveling to pick up business supplies
- Attending a seminar for work
Miles you cannot deduct:
- Commuting from home to a regular office
- Personal errands
If you have a home office, almost all trips from home to client meetings are deductible. Another reason why learning how to track business mileage and deduct it is so important!
Step 3: Save Your Backup Documents
Keep records such as:
- Gas and maintenance receipts
- Insurance statements
- Lease or loan documents if you finance your car
Good record-keeping helps you stay organized and back up your mileage logs in case of an audit.
Mileage Deduction Methods for 2025
Once you track your miles, you’ll choose one of two IRS-approved deduction methods:
1. Standard Mileage Rate
The IRS standard mileage rate for 2025 is expected to be 67 cents per mile.
Example:
Drive 6,000 miles for business:
6,000 × $0.67 = $4,020 deduction!
This method is simple and good for most drivers.
2. Actual Expense Method
Add up:
- Gas
- Insurance
- Repairs
- Depreciation
Deduct the portion that applies to business driving. If your car is expensive or costs a lot to maintain, this could save you more.
Common Mistakes When Tracking Business Mileage
Even if you understand how to track business mileage and deduct it, be careful not to:
- Forget to log small trips
- Mix personal and business miles
- Lose backup documents
- Rely on estimates instead of exact numbers
Helpful Tip: Set a reminder to check your mileage log once a week.
Conclusion: Why Learning How to Track Business Mileage and Deduct It Matters
Mastering how to track business mileage and deduct it in 2025 is essential if you want to lower your taxes and protect your business. Whether you use a manual log or a mileage tracking app, consistency is key. Plus, keeping backup documents will make tax time easier and could save you thousands of dollars.
Get started today and take full control of your business finances!
