How to Track Vehicle Mileage in QuickBooks 2015

By Stephen L. Nelson

QuickBooks 2015 includes a vehicle mileage-tracking feature that lets you track your business miles. To track vehicle mileage in QuickBooks, choose Company→Enter Vehicle Mileage. Then, in the Enter Vehicle Mileage dialog box that appears, record the vehicle, date, miles driven, odometer settings, and reason for the trip.

Do you know the IRS rules for deducting business miles? Essentially, you have two approaches to choose between. The easier method is to record as a business expense an amount per business mile driven. The rate per mile is roughly $0.56, which is far less than the actual cost of driving most cars. But, hey — that’s the price of slothfulness.

The hard method for tracking business miles is to track all your vehicle expenses — including gas, oil, repairs, insurance, and vehicle depreciation — and then record as a business expense the business-use portion of these expenses.

To get the business-use portion of your vehicle, use the ratio of business miles to total miles. For example, if during the year, you drive 6,000 business miles and your total miles are 12,000, your business-use percentage equals 50 percent. In this case, you can record as a business expense 50 percent of your vehicle expenses.

Usually with the hard “actual expenses” method, you get a higher business vehicle expense deduction. However, note that the IRS limits the amount that you can include as vehicle depreciation, so you don’t get as high a deduction as you might at first think. (You may want to consult your tax advisor for details.)

No matter which method you use, you want a record of your actual business miles, which the Enter Vehicle Mileage command enables you to do. By law, you need a good record of business mileage to legitimately claim the deduction.