Taxes

Mileage Tracking Apps: Your New Best Friend

May 17, 2021 • 7 min read
Truck driver using a tablet.
Table of Contents

      Tax bills. Ugh. No one likes them, but you may be able to reduce the amount you owe via business tax deductions.

      Are you a small business owner, a freelancer, a driver for a delivery service, a rideshare driver, or an in-home service provider such as a tutor or caretaker? Then you might be eligible to claim business mileage to save on your tax bill.

      Per the IRS, those who qualify can (usually) calculate a deduction using 1 of 2 methods to find the one that gives the biggest savings:

      • Standard mileage deduction (rates are 57.5¢ for 2020, 56¢ for 2021) 
      • Actual car expenses

      As a savvy business owner, you recognize the value of digital tools, so of course, you’ll want to use a mileage tracking app to record your business-related miles.

      How to Choose a Mileage Tracking App

      All the mileage tracking apps work similarly—the app uses the phone’s location-tracking (GPS) signal to track mileage. The apps require certain phone settings (such as battery optimization off, high-efficiency location tracking on) and access to the phone’s camera and files (for uploading receipts related to tolls and parking).

      How do you choose the mileage tracking app that’s right for you? 

      First, do a bit of soul searching about your business driving. How frequently do you drive for business? Are you tracking miles for more than one business? Do you want to classify miles while waiting in the school carpool line, or will you do it once a week at your computer?

      Then download and test a few apps to find one that meets your requirements and has an interface that you like.

      Ensure the app includes these core features:

      • Automatic syncing of phone data to the vendor’s cloud storage
      • A web dashboard interface
      • Options to auto-track trips, manually start/stop trips, or add past trips
      • Ability to attach parking or toll receipts
      • Easy auto-classification of mileage as personal/business, including “batch” classification
      • Data export capabilities
      • IRS-compliant reports
      • Integration with your tax software or the ability to share data with your tax professional

      No mileage tracking app is 100% accurate. Most “auto-track” options require up to 1 mile to recognize a trip has started and a lag time of up to 15 minutes of stopped activity to recognize that a trip has ended. Thus the “manual stop/start tracking” feature is critical for rideshare drivers.

      The app may also auto-track trips when you are a passenger in a vehicle or out for a bike ride. Therefore, choose an app that allows either pausing of auto-tracking or a quick way to easily classify trips as personal.

      Plan on spending $60–100 per year to get the most benefit from your mileage tracking app. There are free options, but most of the features you’ll really want are in the paid versions.

      Here are 5 popular mileage tracking apps to consider.

      Everlance

      Everlance touts itself as the “simple” mileage tracker.

      Pros:

      • Records trips via auto-detect, manual start/stop, and manual add
      • Swipe classification of miles in the app
      • Allows you to merge multiple trips into 1 trip (for those times when your gas-station stop splits a trip into 2)

      Cons:

      • Configuration in the free (trial) version is confusing

      Quirks:

      • App interface includes “expense log” features, which can be confusing

      Hurdlr

      Hurdlr’s tagline is: “The automatic business expense and mileage tracker.”

      Pros:

      • Can manually add trips in the app
      • AI features suggest auto tags for your frequent routes
      • Automatically tags any semi-auto trips (where you manually started/stopped the drive) as business

      Cons:

      • Auto-tracking doesn’t give you a manual stop button

      Quirks:

      • The app is intuitive but a bit cluttered with other expense tracking features

      MileIQ

      MileIQ only tracks miles (versus other apps that resemble the Swiss Army knife version of tracking apps).

      Pros:

      • Included in Microsoft 365 subscriptions
      • For infrequent drivers, the free version might be sufficient at 40 trips a month
      • Auto-classification of mileage includes any route driven 3 times, frequent drives, and trips based on designated work hours

      Cons:

      • App doesn’t show obvious signs of tracking (no mileage upticks, no map)
      • No in-ap  swipe classification may force you to the web dashboard for quicker mass classification

      Quirks:

      • Mileage that occurs outside designated work hours are auto-classified as personal and personal miles do not appear in the app

      SherpaShare

      Anyone can use SherpaShare, but rideshare drivers will benefit the most. If SherpaShare doesn’t meet your needs, consider one of the many other mileage tracking apps targeted for rideshare drivers.

      Pros:

      • Integrates with apps like Uber, etc.
      • “Pro” features include rideshare-specific features like hotspots, heatmaps, and tools to show hourly revenue

      Cons:

      • Can’t manually add or start a trip via the app
      • No map shown during the drive

      Quirks:

      • Mileage categorization interface is quirky

      TripLog

      TripLog markets itself as the app that gives “customers more options and more control.”

      Pros:

      • Provides 8 ways to automatically track mileage including:
        • Proprietary beacon and drive options to mitigate issues that can occur with phone-only tracking options
        • Gig Economy Apps auto-start (when certain apps, like Dasher, are opened, TripLog starts recording mileage)
      • In-progress trips can be merged, copied, and inserted into other trips

      Cons:

      • No map shown during real-time trip

      Quirks:

      • The apps “daily map view” makes all the day’s trips look like 1 trip

      Now that you know what to look for, It’s time to start using a mileage tracking app to help maximize your small business tax deductions.

      Your business future is brighter with Lendio Bookkeeping.

      About the author
      Katherine O'Malley

      Katherine O'Malley is a contributor to the Lendio blog. A technology geek at heart, she splits her time between traveling, freelance writing, database administration work, and implementing SEO on her travel blog. In her free time, she loves to research the challenges small-to-midsize tourist suppliers face and find ways that technology can help them out.

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