|
Tracking Vehicle
Mileage in QuickBooks 2004
Sandi Smith, CPA
New for 2004, Intuit has added a vehicle mileage tracking feature in
QuickBooks® Financial Software. This feature is useful for two
reasons. First, you might need to bill your clients for your mileage
expenses. Second, business-related mileage is tax-deductible if you can
maintain the needed records.
IRS Eases Paperwork
In 2004, the IRS announced a big benefit for taxpayers related to
vehicle mileage and recordkeeping. Taxpayers previously could not use the
standard mileage rate and had to track expenses instead if they used more
than one car for business. Now, companies with four or less cars can use
the standard mileage rate. This makes 800,000 more businesses eligible to
benefit from this simpler paperwork requirement. Small businesses will
save 8-10 million hours a year in recordkeeping with this expansion of
the standard rate option, according to the IRS.
The current rate for 2004 is 37.5 cents a mile for all business miles
driven. To enter the rate in QuickBooks, click Enter Vehicle Mileage
from the Company menu. Locate the Mileage Rates menu button
in that window to enter the 2004 rate.
Tracking Mileage
Entering mileage is done by vehicle, so the next task is to set up the
vehicle. Do this by using the dropdown menu for the Vehicle field
and entering a new vehicle. In the bottom left corner of the window, you
can enter the start and stop of your odometer or simply enter the total
miles that you drove.
If the mileage is billable, you'll want to check the Billable
box and enter the relevant customer. You’re next asked to select an item.
Set up a service type item or an other charge type item to enable mileage
billing. Select a class, if applicable, and type in notes about the
particular journey in the last box.
Billing the Customer
When you are ready to invoice the customer, pull up the appropriate
sales form and click the Time/Costs button. A new Mileage
tab has been added to the Time/Costs window where you can select the
correct mileage entries. In that window, the Options button allows
you to control whether mileage is entered on the invoice in aggregate or
detail, plus whether the invoice description is taken from the mileage
notes or the item.
Mileage Reporting
Four reports will help you track mileage activity. The first two offer
mileage by vehicle in detail or summary. You can use this report as an
IRS reference when completing your tax forms. The second two reports
offer mileage by job, in detail or summary, which can be used for billing
information.
Tracking vehicle mileage in QuickBooks does have some limitations. It
cannot track the reimbursement of mileage for employees. You can track
expenses however, but instead of using this feature, you would simply use
the Enter Bills feature.
Tracking vehicle mileage has many business benefits. QuickBooks now
makes it easy to do the recordkeeping necessary for this tax deduction.
Sandi Smith, CPA and technology strategist, has been a regular contributor
to the Intuit ProConnection Newsletter since
|