About MileIQ & How It Works
MileIQ is a mileage tracking app that makes it incredibly easy to capture every mile you drive. It eliminates the headache of manually logging every trip you take by automatically detecting you drives and keeping track of them in an easy to use app. This ensures that you capture EVERY drive and leave no money on the table when it’s tax time.
One of the biggest expenses we’ll ever have is… you guessed it… taxes. There’s potential for most of our hard-earned dollars to go directly to Uncle Sam. There’s sales tax, income tax, estate tax, and a litany of other taxes that siphon our bank accounts. That’s why it’s important to take advantage of every tax break and deduction you can get your hands on. Enter: MileIQ.
MileIQ is an American-based company that has developed a mileage tracking and logging app that uses automatic mileage tracking to calculate your mileage. You can then categorize the miles as either personal or business related. You can also choose other custom categories such as medical or charity-related. Some miles are potential tax deductions with the IRS. MileIQ is the first mobile app to passively track mileage data, and it does a phenomenal job at it.
I like MileIQ because it automatically calculates the value of your drives, and at 54 cents per mile, it adds up fast. And all the data is stored securely in the cloud. If your accountant (or the IRS) asks to see the data, you can access it in a flash. Plus, the MileIQ app runs in the background of your phone. You literally don’t have to do anything. You don’t have to open the app or turn anything on… just drive.
If you’d like to get started with MileIQ, they allow you to view, edit, and report 40 drives each month for free. After that, it’s only $5.99 per month. At the current mileage rate, you wouldn’t have to drive that many miles to make it worth your while.
Try MileIQ today!
Mileage Deduction Rates and Rules
For the purposes of this article, I will focus on business driving. Although you can deduct charity and medical drives, I have extensive experience with business driving and would like to focus on what I know.
If you drive for business purposes, the IRS will allow you to take a mileage deduction of 54 cents for every mile you drive (in 2016). If you’re planning to take a mileage deduction on your taxes, understand that you can only deduct trips that are for business. So what qualifies for a mileage deduction?
Travel Between Offices
If you’re driving from your office or work site to a second place of business, it is tax deductible. Let’s say that you’re a regional manager for a bank and you’re driving from Bank A to Bank B. This should be tax-deductible.
Be sure to deduct any miles for business-related errands. This includes going to the bank, office supply store, and post office. The bank and post office are a source of some of my mileage, because I am frequently making deposits and picking up stamps for my direct-mail campaigns.
Business Meals and Entertainment
Are you taking clients or vendors out to dinner? Be sure to keep track of it. This also includes going out for drinks and other forms of entertainment.
This is pretty obvious – these are the miles you drive to and from the airport for a business trip.
If you’re driving to and from side-gigs like babysitting, lawn work, or pet care, you can deduct those miles as well.
This is another big source of my personal miles, because in my line of business I am frequently driving to meet with customers and potential customers.
Temporary Job Sites
Driving from home to a temporary work location that lasts less than one year is also deductible.
Most people are not taking advantage of this because they don’t know it’s deductible! If you’re looking for work, you may deduct the drives you take to find a job in your current occupation. However, you can’t take this deduction if you’re looking for a job in a new industry for the first time. I’m not sure why this is the rule, but it is.
MileIQ currently has three different plans you can choose from:
Annual: $59.99 per year allows you to view, edit and report unlimited drives each month.
Monthly: $5.99 per month to view, edit and report unlimited drives each month.
Limited: Allows you to view, edit and report up to 40 drives each month for free.
I had the monthly plan for about a year and just recently switched over to the yearly plan to save a few bucks. One of their promises is to keep the app ad-free, which is kind of nice. Of course, they need the revenue from subscriptions in order to do this, but six bucks per month is an incredibly small price to pay to have your mileage automatically tracked and conveniently stored.
Has it been worth it to me? You bet. Here are the actual deductions MileIQ has tracked for me so far this year:
January - $0 (This is my fault, I didn’t categorize those drives. Shame on me)
February – $144
March – $138
April – $139
May – $224
June – $180
July – $274
In just six months (I’m not counting January), MileIQ has logged $1,099 in deductions for me. For the sake of easy math, let’s double that and assume that over the course of the year, I’ll have $2,198 in deductible mileage.
This means MileIQ will get me a $2,000 tax deduction this year.
How much does this actually save me? Again, for the sake of easy math, let’s use the baseline that the average American pays 20% of his/her income in federal taxes. 20% of $2,000 is $400.
I paid $59.99 per year for MileIQ to save me over $400 in taxes. Not bad.
You don’t even have to pay for it if you’re doing less than 40 drives per month, but even if you do more than 40, it’s pretty easy to justify the cost. Besides, if you’re using MileIQ for your business, MileIQ itself may be deductible too.
Note: My deduction is actually on the low side. Most MileIQ users get an average deduction of more than $6,900 per year. It doesn’t just save you money, though. It also saves a lot of time. I can’t imagine how much time I would be wasting logging my miles, but MileIQ says that the average user saves two hours every month. Would you pay $5.99 for two extra hours? Easy choice.
As a business owner, I love MileIQ because it is constantly working for me. It logs my miles so all I have to do is go back and categorize them as personal or business-related. At the end of the year, I add all the miles up and take the deduction.
I hope you enjoyed my MileIQ app review and I hope you give it a shot. You get 40 drives per month for free anyway, but $5 per month is nothing for this service. Do the math and start saving!
Sign up for MileIQ today! By signing up through Personal Finance Genius, you can get 20% off your annual subscription.