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Money and Miles: Why REALTORS® Should Record Their Mileage
LOUISIANA REALTORS • May 25, 2018
Commuting from showings to closings to open houses can take a toll on your odometer. While your vehicle is one of your most important resources as a REALTOR®, it can also be convenient come tax time. Did you know that the mileage deduction for 2018 is 54.5 cents per mile? Now a couple of quarters each mile may not sound like much, but it can really add up. Let’s assume you drive 50 miles a day on average, five days a week, 48 weeks a year. You’re looking at approximately $6,500 that can be deducted from your taxable income. If you aren’t recording your mileage for tax purposes, you are literally leaving money on the table, or road.
How Do You Record and Report Your Mileage
Unfortunately the IRS doesn’t using the honor system. This means that you’ll need to maintain a compliant mileage log. In order for a log to be compliant, it will need to include the following information:
- The qualifying mileage for each trip.
- The dates of each trip.
- The locations involved in each trip.
- The business purpose behind these trips.
Now you won’t need to submit this data when you file your taxes, but it should be saved with your tax documents. It is recommended to keep all of your tax records for at least three years.
What Miles Can You Include for Tax Purposes?
There are a number of different driving purposes that meet the IRS’s definition of “business related”. Visiting new properties, meeting prospective and existing clients, traveling between offices, even picking up different supplies. It is important to know that your commute (from home to work and vice versa) cannot be included in these calculations.
What is the Best Way to Track Your Miles?
There are three ways to track your mileage that the IRS will accept. You can keep a manual, handwritten log. You can track your mileage digitally with photos and a spreadsheet. You can also download a mileage tracking app on your mobile device. A manual log is typically the cheapest option, as it only requires a notebook and pen. The downside to this option is that it is difficult to accurately record if you forget an entry, and if you lose the log, there is no backup. The digital option with photos and spreadsheets can be more reliable, it also tends to be more work. Mobile apps that automatically track and record your mileage are usually your best bet.
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As previewed last week, NAR is pleased to share the latest consumer guide focused on preparing for homeownership. This guide covers what prospective buyers should consider as they kick off the home purchase process, including the importance of credit scores, mortgage pre-approval, down payments, budgeting, and educational resources. As a reminder, all guides in this series are available for download—in both English and Spanish—on facts.realtor . Please allow a few days for the Spanish version of the latest resource to be translated and uploaded. For ease of reference, below is a list of the most recent guides: NEW: Preparing for Homeownership Escrow and Earnest Money Pricing Your Home Preparing to Sell Your Home Fire Damage and Policy Coverage Thank you for your continued engagement with the “Consumer Guide” series and for sharing the resources with potential clients to ensure they have the information they need to be successful in their homebuying or selling journey. Remember that these guides are for informational purposes only and are not meant to enact or change any existing NAR policy. Be on the lookout for next week’s guide on Wednesday, which will cover property taxes.
As previewed last week, NAR is pleased to share the latest consumer guide focused on escrow. This guide covers what homebuyers should know about earnest money deposits, including the general terms and use cases in real estate transactions. As a reminder, all guides in this series are available for download—in both English and Spanish—on facts.realtor . Please allow a few days for the Spanish version of the latest resource to be translated and uploaded. For ease of reference, below is a list of the most recent guides: NEW: Escrow and Earnest Money Pricing Your Home Preparing to Sell Your Home Fire Damage and Policy Coverage Flood Insurance Thank you for your continued engagement with the “Consumer Guide” series and for sharing the resources with prospective clients to ensure they have the information they need to find success in their homebuying or selling journey. Remember that these guides are for informational purposes only and are not meant to enact or change any existing NAR policy. Be on the lookout for next week’s guide on Wednesday, which will cover preparing prospective buyers for homeownership.
The Louisiana REALTORS® Board of Directors will conduct several elections this Spring. Interested candidates that meet the qualification who are looking to serve at either the state association level or the national association level are encouraged to view the criteria and submit an application. An application that is not submitted on the appropriate form or not submitted pursuant to the instructions shall not be considered as submitted timely.
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Baton Rouge, LA 70802