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How to Track Mileage and Expenses for a Side Hustle in One Place

Managing a side hustle can be rewarding, but it also brings a unique set of challenges, especially when it comes to tracking mileage and expenses. Whether you're driving for a rideshare company, delivering food, or running an online business, keeping a close eye on your finances is crucial. Not only does it help you understand your profitability, but it also prepares you for tax season—when every deduction counts. Here’s how to effectively track mileage and side hustle expenses in one place.

Understanding the Importance of Tracking Mileage and Expenses

Before diving into the methods, it's essential to grasp why tracking mileage and expenses is vital.

The Tax Benefits

The IRS allows you to deduct certain expenses related to your side hustle, including vehicle mileage. For 2023, the standard mileage rate is 65.5 cents per mile. If you drive 1,000 miles for your side hustle, that’s a $655 deduction. Add in other expenses like supplies, software, and marketing, and you can significantly reduce your taxable income.

Budgeting and Profitability

By tracking your expenses, you can gain insights into where your money is going. This is especially important for side hustles, where it may be easy to overlook smaller costs that add up over time.

How to Track Mileage Side Hustle Expenses Effectively

Tracking mileage and side hustle expenses can be done through various methods. Let’s explore the most effective options available today.

1. Use Mileage Tracking Apps

There are several apps designed specifically for tracking mileage and expenses. These apps can automate much of the process, making your life easier.

#### a. MileIQ

MileIQ is a popular app for tracking mileage. It runs in the background of your smartphone, automatically logging your trips. At the end of each trip, you can categorize it as business or personal. The app offers a free tier that allows you to log up to 40 trips per month, which might be sufficient for casual side hustlers.

Pros:

• Automatic trip detection
• Simple categorization
• Reports for tax purposes

Cons:

• Limited free version
• Monthly subscription required for unlimited use

#### b. Everlance

Everlance offers both mileage tracking and expense tracking, making it a comprehensive choice. It allows you to log mileage automatically and input expenses manually or by snapping photos of receipts.

Pros:

• Unlimited mileage tracking in the free version
• Receipt scanning feature for expenses
• Provides tax-ready reports

Cons:

• The premium version is necessary for advanced features, which may not fit everyone’s budget.

2. Use General Expense Tracking Apps

While mileage tracking apps are great, you might want a solution that combines mileage with overall expense tracking.

#### a. YNAB (You Need A Budget)

YNAB is a budgeting tool that helps users allocate their income towards expenses, savings, and investments. While it does not specialize in mileage tracking, you can create categories for your side hustle expenses, including mileage.

Pros:

• Comprehensive budgeting tool
• Encourages proactive financial management
• Strong educational resources

Cons:

• Learning curve for new users
• Monthly fee of $14.99 or annual fee of $98.99

#### b. GoodBudget

GoodBudget is a digital envelope budgeting app that can help you manage various expense categories. You can manually log your mileage and expenses, making it easy to keep everything in one place.

Pros:

• Free version available
• User-friendly interface
• Suitable for cash-based budgeting

Cons:

• Manual entry can be time-consuming
• Limited features compared to dedicated mileage apps

3. Use a Spreadsheet

For those who prefer a DIY approach, using a spreadsheet can be an effective way to track mileage and expenses. You can create a simple table with columns for date, mileage, expense category, amount, and any notes you find necessary.

#### How to Set Up Your Spreadsheet

1. Create Columns: Set up columns for Date, Trip Purpose, Starting Mileage, Ending Mileage, Total Miles, Expense Category, Amount, and Notes.
2. Log Mileage: Each time you complete a trip, log the starting and ending mileage. Subtract the starting mileage from the ending mileage to find the total miles driven.
3. Track Expenses: Whenever you incur an expense related to your side hustle, enter it into the spreadsheet with the relevant details.
4. Calculate Totals: Regularly sum up your mileage and expenses to get a clear view of your financial situation.

Pros:

• Fully customizable
• No app subscription fees

Cons:

• Time-consuming to maintain
• Requires a level of spreadsheet proficiency

4. Combine Methods for Better Tracking

Sometimes, the best approach may involve combining different methods. For example, you might use a mileage tracking app like MileIQ for automatic logging while also maintaining a spreadsheet for expense tracking. This hybrid approach allows you to leverage the strengths of each method while covering any shortcomings.

Tips for Efficient Tracking

1. Set a Routine

Establish a regular schedule (weekly or monthly) to review and update your mileage and expenses. This keeps it manageable and ensures you don’t forget to log anything.

2. Categorize Wisely

Create clear categories for your expenses. This will help you see where your money is going and identify areas for potential savings. Common categories for side hustles might include travel, supplies, marketing, and software subscriptions.

3. Keep Detailed Records

Whenever possible, keep receipts and detailed notes about your expenses. This will be invaluable during tax season and can help you justify your deductions if the IRS has questions.

4. Stay Informed

Keep an eye on tax laws and mileage rates to ensure you’re taking full advantage of available deductions. Tax regulations can change, and staying informed will help you maximize your benefits.

Conclusion

Tracking your mileage and side hustle expenses doesn’t have to be complicated. Whether you choose to go with dedicated apps like MileIQ or Everlance, budgeting tools like YNAB or GoodBudget, or even a simple spreadsheet, the key is consistency and organization. Each method has its tradeoffs, so pick the one that best fits your lifestyle and side hustle needs.

For those looking for a simple solution to log expenses via text, consider trying DrakeAI. This app allows you to input expenses easily without the need to connect your bank account, making it a hassle-free way to keep everything organized.

Try DrakeAI free on Android - iOS coming soon.