First, thank you all for the wonderful tips and strategies posted on this forum! They are precious nuggets that have helped me become more organized and able to track income and expenses for tax purposes. I am sincerely grateful :-)
That being said, I am still struggling with mileage tracking and accounting and I really need some help...
Question #1: What do you use to log your daily mileage?
Shameful to admit... I started tracking it on scraps of paper, which I've transferred to a spiral notebook. All of the mileage logs I've seen as office supply stores seem so tiny and look like I'd run out of sheets quickly. I am thinking about using a stenographer's notebook or a composition notebook, but I'd really like to hear what has worked best for others...
Question #2: How do I sort out the business, personal and commuter mileage when all three activities are taking place on the same day?
Can I always use simple math to always subtract out my commuter miles? What about scenarios involving a mixture of business and personal stops?
My daily commute is 32 miles each way - 64 miles R/T.
Breakfast FF shop - 2 miles away from home, opposite direction from commute
Office - 34 miles
Bank shop 1 - 14 miles (further away from home)
Bank shop 2 - 3 miles (further still)
Home - 49 miles (passed the exit for work on the way home)
Am I correct that the mileage should break down as follows?
- Commute: 64 miles
- Business: 38 miles
Bank shop - 39 miles (further west, but not as far north as work)
Office - 10 miles
Lunch @ non MS restaurant - 2 miles
Office - 2 miles
Auto dealer shop - 6 miles (sort of on my way home but significantly "off route"
Home - 28 miles
None of the shops were really, en route to or from work. Out of convenience, I took some back roads which in one case shortened the mileage a bit and in one case it lengthened it a bit. Hence, the mileages don't exactly match-up. Can I just add add up the total mileage and subtract 64 for R/T commute and 4 for personal?
If not, how on earth do I figure this out?!
(Day of MS in a nearby city with a stop at a friend's house)
Auto dealer shop - 39 miles
Retail shop 1 - 3 miles
Retail shop 2 - 1 mile
Amusement shop - 5 miles
Friend's house - 8 miles
Travel Center shop - 24 miles
Home - 18 miles
I must admit I'm totally scratching my head on this one!! How do I determine which miles are business and which miles are personal?
Also, would it make a difference if I did the travel center shop at the beginning of the day and came straight home from my friend's house?
IRS rules are not crystal clear. They do indicate that you cannot deduct miles to commute to work. They also indicate that if you work in more than one location you can deduct the mileage between job 1 and job 2 or location 1 and location 2. This works fine if you work for ABC and they have you at one location in the morning and covering at some other location in the afternoon. As shoppers, though, we need to figure out what is fair to us and to our fellow taxpayers.
I think your notion of taking total mileage and subtracting out your normal commute mileage should be considered fair and reasonable to IRS.
A small amount of deviation from the most direct route should not be an issue. I don't think there is any hard and fast percentage or anything like that. On your example of visiting a friend, that could have been 8 miles completely out of your way making the Travel Center shop 8 miles further as well. You are going to need to use your best judgment about whether it was more deviation from a reasonable route than you would care to justify. When I am doing a whole lot of personal running around and including shops I use maps.google.com to figure a reasonable route for the shops and just claim that even if it is only part of my overall mileage. But if I am going 2 blocks out of my way to pick up the dry cleaning on a 40 mile route I'm sure not going to bother with the deviation.
The chance that you will ever be audited for mystery shopping is very slim. Nevertheless you need some sort of contemporaneous record of business miles. Some folks do that as a mileage log they leave in the car. I usually write my start and ending mileage on whatever paperwork I have taken along for the shop and make whatever adjustments I may need to make as I enter it on my spreadsheet.
I started to calculate my mileage using a "google map work route" for each day, adding only the locations where I have to do a shop, starting from home and ending at home. I write down the total mileage on my route/mileage notebook. If I have to do a personal stop, I just add it after I have calculated the "work route". I am not sure if this is a legal way to do it....
It sounds as though 'playing fair' is what you are trying to do, and what more can IRS ask? I suspect that overall shoppers are much more conservative in their mileage claims than most businesses. I see corporate vehicles in residential driveways and know that the corporation is not likely to be deducting 'commute' miles for their employee to drive the company vehicle to the place of business daily but rather will deduct all miles from 1/1 to 12/31.
I enter my commute route into google maps. Then I redo it adding the extra stops I will be making. I claim the difference in the mileage. So to go to school and back is 80 miles, but if I stop and do some shops around the way and it comes to 96 miles then I claim the 16 mile difference.
At the risk of sounding like a spammer, which I am not, since this is my first post I downloaded an app on my cell phone to track my mileage. It's pretty easy to use, you can either set it to track your mileage via GPS or manually input your beginning/ending mileage, and it calculates the actual deduction for you when you are done. There is an option to print a log for year end taxes as well. It has some options to add receipts and expenses but I have not used those yet. TripLog is the one I have (Android) but there are others.
I started by doing each trip individually but then I realized that only the total mileage is important so if I'm doing a route, I just leave it on through the route.
There are lots of ways to skin this cat. I just punch the trip log on the dashboard to zero before I put the vehicle in gear to leave the driveway and copy the final mileage on my shop notes when I get home. I may adjust for personal mileage if I went unreasonably off the most direct path for personal errands. The mileage gets entered on my shop sheet after I put in my report so is a contemporaneous record of mileage.