How to track mileage for my franchise is a question I hear all the time. It is a very simple process but it can be time consuming. Developing a process that works best for you is the key to making it a stress free task.
Here are some easy tips to help you:
1. Know the current mileage rate: Beginning on Jan. 1, 2014, the standard mileage rate for the use of a car (also vans, pickups or panel trucks) will be: 56 cents per mile for business miles driven.
2. Keep a planner book in your business vehicle and write the customer name, nature of the trip, and round trip miles on the day of the trip. Total the week across. At the end of the month total the weeks and write the number in the bottom right of the page. At the end of the year you will only have 12 numbers to total and you
will have the documentation as required by the IRS.
3. Mileage reimbursements can be submitted to the company on an expense report. The benefit of a reimbursement is a write off for the company and non-taxable reimbursement to the employee or business owner.
4. Continue to keep gas receipts and recording gas purchases in your bookkeeping. You cannot take mileage and actual vehicle expense, you must choose which one is best. There are some other considerations too keep in mind and you should consult with your tax preparer for more clarification.
5. Tracking the odometer reading is not necessary. As long as you are using the documentation in step 2 you should be fine.
The IRS website has more information and will help you decide which deduction is best for your business. The first year your business return is filed is where you will make the decision of which deduction is best. Once you have made that decision you must file the same way on an ongoing basis. You cannot choose mileage one year and actual the next. Make sure you consult with your tax preparer before making your decision. The following link to the IRS web page will provide further detail http://www.irs.gov/publications/p463/ch04.html
Beth is a key note public speaker, bookkeeping systems/program developer, and accountant. She applies her 30+ years of experience as a small business and franchise advisor to those starting a new business and those looking to take control of an existing business. Through her workshops and individual training sessions she teaches business owners how to focus on the core of their services and helps them develop strategic goals for business growth. Beth, a Certified Quickbooks Pro Advisor, brings clarity and understanding to the finances of business development and assists entrepreneurs and business owners achieve financial success.