If you're the type of agent who visits your clients, or even goes door-knocking, you need to be tracking your mileage. At a tax deduction rate of 58.5 cents per mile for the first 6 months of 2022 and 62.5 cents for the last 6 months of 2022, why wouldn’t you?
You Need a Mileage Tracking System
Actually, I can answer that. People don’t track mileage because they don’t have a system in place. They either forget, or find that it’s a hassle to pull out a notebook and write it down. To track mileage consistently, it needs to happen automatically, with very little input from you.
Remember: if you drove as little as 1000 miles for business in 2022, that’s worth over a $600 tax deduction.
We've found two different types of solutions that both track your mileage automatically, making it a lot easier to benefit from the tax deduction.
Related Reading: The Ultimate Tax Deductions Checklist for Independent Insurance Agents
MileIQ for Mileage Tracking
MileIQ is an app you download to your smartphone. Since we all have our phones with us at all times, the app runs in the background and automatically tracks each trip you make using your phone’s GPS capability.
After you’ve driven somewhere, an alert pops up on your phone, asking you to classify your trip. You simply swipe to the right to classify this as a business trip, or to the left for personal.
At tax time, you can easily export reports to give to your accountant, and each week, the app will email you reports showing how much your potential deductions are.Better yet, swipe and hold to enter a purpose for the trip, which you’ll need if you ever get audited by the IRS.
There are some built-in business purposes that you can customize, such as Customer Visit, Meeting, Meal/Entertain, Airport/Travel, etc. On the personal side, purposes include Medical, Charity, and Moving, which are also deductible.
This is a really well-designed app, and it's easy to use. So what does it cost?
Cost of MileIQ
MileIQ has a free "Basic" plan that allows you to record 40 free drives per month. If you drive your car more than one place per day, that gets used up pretty quickly, so this is really a way for you to test out the app and see how it works for you before moving to a paid plan.
The paid "Unlimited" options are either $5.99 per month, or $59.99 per year. Considering the time and effort it saves you, plus the deductions it can get for you, this seems like a no-brainer to me.
TripLog for Mileage Tracking
With TripLog, you can ditch manual mileage logs and make reimbursing your team’s mileage and expenses simple.
For agents who are self-employed, the TripLog app helps you never miss a mile. It automatically tracks your mileage, but you can choose from six unique different ways to track it using your smartphone app:
- Car Bluetooth
- TripLog Beacon
- TripLog Drive
You can easily classify your trips as business or personal with a simple swipe in the app. There are other features available like route planning, frequent trip rules, and tax compliant mileage report that make this a great option for independent agents.
There are several package options, with the cheapest being free for up to 40 trips. The premium version is only $59.99 per user per year.
Start Tracking Your Mileage As An Independent Insurance Agent
If you need to start tracking your mileage, MileIQ and TripLog are great options to consider.
If you use something already, whether it’s a paper logbook or some other app or system, I’d love to hear about it in the comments below.