Tracking Mileage: Two Apps Reviewed

You can summon the power of the Cloud to save on your tax bill. I tell you which app works best for me and why. Image by: Bitmoji

This post originally appeared on the Hermit Haus Redevelopment website on 2016-05-04.

Everyone pays taxes. Business people can deduct expenses related to generating the income their business produces, including expensing a corporate or personal car used in the business. In fact, most companies reimburse their employees' car expenses. So you don’t even have to own a business to be reimbursed for or deduct the use of your car in your or your employer’s business.

But the IRS requires you to keep records of how and when you used your car, and most of us are not very good at remembering to keep track of that. So most people under or over report the use of their car. Both are bad. If you under report, you’re paying more in taxes than is fair. If you over report (meaning you can’t substantiate your usage), you could face penalties in addition to the loss of deductions if you are audited.

Historically, I have erred on the side of caution and under reported. That is, I reported only what I remembered to document.

Wouldn’t it be great if your smart phone—something you have with you all the time—could document your car use for you? Apparently, some clever programmers thought the same thing. In this post, I’ll review two apps that keep track of your mileage for you. It’s no big secret; I wasn’t satisfied with the first one, so I bought the second one. I’ll talk about them in order.

Disclaimer Time!

Both of these are iPhone apps, but they are also available for other platforms. Since the iPhone is almost idiot proof, it’s what I use. I can’t tell you if the Android or Windows versions of these apps are available or if they differ from the iPhone versions. Future versions of these apps may address some of the shortcomings of the versions I review here.

Both apps provide usable mileage reports and estimates of your mileage deductions. I paid the full subscription price for both apps, and I have no investment in either company.

Mile IQ 1.7.1

The terminal points of the trip are all that appear. In this case, Barrington Oaks is in North Austin. Oak Brook sometimes shows up as Austin or the neighborhood name.

When I first started using Mile IQ, I was impressed. I would have finally an automatic, accurate record of my business miles. The app works very well at the basic level of detecting when you start moving and when you stop. But the more I used it, the more dissatisfied I became:

• Categorizing trips is easy. Swipe the map right for business, left for personal. Those are you only options.
• Mile IQ only tracks your starting and ending locations. Then it calculates the most direct route between them, regardless of the actual route you traveled. Worse, if you start and end at the same location as you often do when driving for dollars, it doesn’t think you have gone anywhere, so it doesn’t record the trip. The way Mile IQ calculates your mileage almost guarantees you’ll underreport despite using the app to capture your data.
• The app only records the name of the city where you start and stop—not necessarily the city you would think and not necessarily the same name for every trip. This idiosyncrasy makes it easy to misidentify trips because you don’t recognize your terminal points. The map is shows isn’t detailed enough to help you identify the points either.
• In Texas, there is only one season: construction. Roads are always under construction, which backs up traffic—especially on two-lane roads that are reduced to one lane for miles during rush hour. I’ve had Mile IQ break up a single trip into three because it logged each time I had to wait for traffic to clear. (Unfortunately, there are times when even the Googles can’t route you around construction.)
• But my biggest problem with the app is that the IRS requires you to list the business purpose of each trip. Mile IQ has no way to record that in real time. Instead, you have to wait until you can download an .CSV file and manually add the purpose to each recorded leg of each trip. If you can identify the leg by its esoteric termini. If you can then remember why you stopped in BFE three times on the way from Burlington to McNeil on a day you thought you traveled from Cameron to Austin. [I did find out later that you can add notes to each leg, but I don’t know where these notes show up on the reports.]

Basically, Mile IQ has a lot of unrealized potential. Unless it drastically improves, stay away from it. It will waste your time and money while taxing your memory in the false promise of making your life easier.

Taxbot 6.2

You can see the actual route I drove was not the most direct. And the bathroom break mid trip did not force me to explain if I went #1 or #2.

A salesman at the AT&T store who sold me a replacement iPhone told me about Taxbot. He said he had used it for his sideline business selling health supplements, and his accountant loved the report it provided at the end of every year. I was intrigued. Not only did Taxbot overcome all of the shortcomings of Mile IQ, it also tracked income and expense. But I’m getting ahead of myself.

• Taxbot uses more bandwidth, because it tracks your actual route, giving you an accurate measure of the mileage you traveled, including round trips.
• As you categorize each trip as business or personal, you can enter the business purpose, the company name, and the vehicle you drove.
• Taxbot has a longer wait to determine the end of a trip, so it may actually combine trips for different purposes. To overcome this minor irritant, you can tap an End Trip button if you need to. I’d much rather do that than explain that I was stopped in traffic three times on the same trip leg.
• Besides all that, Taxbot lets you record income and expense transactions. You can even attach pictures of your receipts to the transaction. (I haven’t actually figured out how to get these pictures back, so I’m still keeping manual duplicates.)
• The only problem I encountered was that it failed to recognize the paid subscription from the iTunes Store. But it’s hardly the only app that has problems in that regard. A quick call to support straightened the biling out.

At twice the price ($9.99/month or $99/year), Taxbot provides eight times the value of Mile IQ. If you don’t save many times over the cost, you’re either too organized or not working hard enough. Now if it only talked to Quickbooks.