08 Jun Tax Tip Thursday – Automatic Mileage Tracking
Tax Tip Thursday Presented by TaxBot!
Get to know TaxBot! A new version of the TaxBot mobile app was recently released and Surge365 is pleased to share helpful tips on the TaxBot App! Be sure to take advantage of this valuable business tool that is INCLUDED in your monthly SBA fee. All you need to do is log in to your Surge365 Back Office, select the TaxBot ad and complete the short registration form. Do it today and learn how to keep more of your money! You can also find Tax Tip Thursday tips on the Wavebreak blog.
Automatic Mileage Tracking
Did you know automobile deductions are the #1 audited expense by the IRS (same goes for the CRA for our Canadian customers). The reason is simple… vehicle deductions are worth a lot of money AND most people are tracking their mileage improperly. So it’s an easy way for the IRS to collect money. Tracking mileage the old way is painful. Taxbot is one of the few mileage tracking applications that focuses on compliance! And we try to automate it as much as possible. With Taxbot there are 3 ways to track your mileage:
Automatic Trip Tracking: Set it and forget it! When this feature is turned on you don’t have to remember to track your mileage. Taxbot monitors the sensors in your phone and as soon as you start driving over 15 mph then Taxbot will track the trip for you. When Taxbot senses you have stopped driving it will end the trip for you and store it in a temporary queue.
2. Taxbot will have automatically filled in all the details such as start and end addresses, total mileage, time and date, and more.
3. All you have to do is input the purpose (required by the IRS). For example: “Sales call with John Smith at Acme Company” (**See the section called “Your Alibi” below)
4. Bonus for you calendar users: If you arrive at a destination within 30 minutes of an appointment on your calendar, TAXBOT will automatically import any details in the calendar as the purpose.Manual GPS Tracking: If you don’t drive very often for business you can still use our GPS mileage tracking. Track a trip with the push of a button. End it the same way and the addresses, route map, time, and total mileage are all filled out for you. Just add the business purpose and save it.
Maps Integration: If you don’t drive enough to justify the automatic mileage tracking you can recreate trips by entering the starting and ending address for a business stop and using a system similar to Google Maps and we will recreate the route for you. Simply add the details of the visit and save it!
**Your Alibi: When tracking mileage you should always put in a detailed description of your trip. A mileage log is like a book of alibis to prove your deductions to the government. By regulation it should be specific. “Meeting with client” is a weak description and could be disallowed by an agent. “Met with John Smith to show xyz product,” is a strong alibi. Make sure you try to be as detailed as possible while also being brief. If you keep detailed calendar appointments then this process is completely automated with the calendar integration mentioned above. Click the graphic to see how automatic mileage tracking works!
— Mileage Tracking FAQs —
What happens if I incorrectly approve or reject an expense or mileage? As always, you have full control over the classification of all expense and mileage tracking within the Taxbot app. If you incorrectly approve or reject an entry, you can simply go into the Classified Expenses section and edit the entry.
How soon after an expense or trip must I review and approve or reject them? Although there are no specific guidelines or requirements, the IRS does instruct that records should be contemporaneous. This means that, in order to avoid them from being disallowed, you should record and classify your expenses as close in time to the event as possible.
How does using Taxbot affect my usage of data on my smart phone? Taxbot actually uses very little data. While driving and tracking your trips, Taxbot engages your phone’s GPS, which is free to access and does not utilize data through your carrier or data plan. In fact, Taxbot uses far less data than any social media app.
How does using Taxbot affect the battery life of my smart phone? Taxbot is very conscious of the battery life of your phone. While you’re driving, Taxbot engages your phone’s GPS and battery usage is similar to what you might experience while using common navigation apps, such as Google Maps or Apple Maps. However, when you’re not driving, Taxbot functions in a very low power state and utilizes only minimal battery life.
Can Taxbot integrate with my personal calendar in any way? Yes, Taxbot integrates with your phone calendar in a couple of ways. For example, when using the app to automatically track the mileage of a trip, Taxbot will check your calendar upon arriving at your destination. If your calendar includes a scheduled appointment within 30 minutes, Taxbot will then recommend the appointment as being the purpose for your trip. Additionally, for recording expenses, you can access all calendar appointments from the past three days and import the details into the appropriate expense reports.
How does Taxbot ensure that my expense and mileage tracking will be compliant? Taxbot will always prompt you to provide any information that the IRS may require for each type of expense. Of course, it is up to you to provide accurate, legitimate and truthful records and details. Doing so will help ensure the best possible outcome in terms of being compliant. Additionally, we offer a wide variety of resources within our Knowledge Base that you can use to educate yourself on current tax laws and regulations.