In this lesson, we're going to learn how to use QuickBooks self employed to track auto miles. Let's start by selecting the mileage tab. For QuickBooks self employed, makes tracking mileage super, super simple. But before we get into the mechanics of how to track mileage will first learn how to set up the vehicle that we will be using for business purposes. The reason why mine is tracking is important is that most of all, most of us use our cars for both business and for personal purposes. So in order for us to deduct all the mileage that we use for that particular year, for business purposes, we have to keep track of how many of the total miles driven in any given year were related to our business.

So let's start by adding a vehicle. Now there are two ways you can get to this screen, you can either click on this particular symbol on the taxes, you see vehicle info, you can click on that and add your vehicle. Or you can simply from the mileage screen, you can just go either from the mileage screen, you can just click on the down arrow beside add trip. And then you can click on Edit vehicle or add vehicle. So once you get to this window, you want to fill out the information on this window that's all related to your vehicle. So it says describe your vehicle.

So let's just say we're adding a 2016 Honda Accord. What year is the vehicle? The vehicle is a Oh, I'm sorry. Let me um change that. So sorry. It says the vehicle make and model.

So the maker model is a Honda Accord. And then the year of the vehicle is a 2015. Now, do you own the vehicle? Or are you leasing the vehicle? In most cases, most independent contractors and small businesses use their personal vehicle. So you're going to say you own the vehicle.

And how much did you do the vehicle cost you we're going to assume it cost you $15,000. And then it's going to ask you what when do you buy this vehicle? So I'm going to change this I'm going to say that I purchased this field this vehicle in 2000. And let's just say 2000 and do it here. It's gonna take forever, that's I purchased the vehicle January 1 2013. Well, that's not possible Is it because if the vehicle is a 2000 15 there's no way I could have purchased in 13.

So let's go up here and make a change. So I'm going to change this 2015 and say that I actually, that is the vehicle is a 2010 rather than 2015. And I'm going to say that I purchased the vehicle in 2013. Okay. So now the question is, what date was this vehicle placed in service. So my business started in, let's say, July of 2015.

So I would put in this spot, I'll change that to July. And we'll just think of July 1 2015. That's the date that the date that the vehicle was actually placed in this case, as you can see, we have the vehicle year which is 2010 We have when we purchased the vehicle, which was in 2013. But we didn't place the vehicle in service until January July 1 2015. So essentially what this is saying is that my business started July 1 of 2015. Now the question is how do you want to record mileage for your 2004 2017.

So we're going to record mileage by recording the odometer reading and how this works is when you so let's say for example, it says the domitor on July 1 2017, and that's because we are currently in 2017. And our business started in 15. So obviously that means in 17, January 1 rather 2017 we were already in business. So let's let's say that when in 2017 January 1, we had 65,000 miles on our vehicle, okay. And that's all you enter for now. And then you're going to save it because at the end of the year, you're going to come back.

And you're going to provide you're going to input what the odometer reading is on December 31 of 2017. Now what this information does once you enter the odometer mileage for December 31 2017, the system is going to calculate how many total miles that you drove in 2017. And it's going to give you a breakdown of how many of those miles driven were for business purposes, and how many were for personal so it's going to give you a percentage of mileage used for business. But this is the information that your tax preparer or your accountant is going to need when it's time for you to deduct your mileage. So it's really it's very important that you feel these two boxes. is in beginning of the year, and also the end of year.

So once we have completed filling this out, then we're going to go ahead and click on Save. Now just one more thing, if you are like this is 2000 tracks here, let's say 2017. If, for example, you want to let's say you're inputting information for prior years, for example, you're trying to play catch up, you have a tax return that you have not yet filed for prior years. And you need this information, you can actually click on this down arrow, and you can go back as far as 2014. So if you needed to get vehicle information for 14 or rather you needed to input vehicle vehicle information for 2014 you can do so by clicking on this arrow and picking any given year that's in this in this box. Okay.

Now that we have set up our vehicle, we're going to learn how to record mileage. So let's start by breaking down some of the features of this screen. So first we have type. And what type pretty much breaks down to is it these business miles personal miles or unreviewed miles that we're looking at. In this case, we're looking at all of all of them. So we're looking at both business personal and on reviewed.

So if we just click on business, it's going to let us know that for business purposes, we have only had 407 miles driven this year. for personal purposes purposes, we have three entries and equated to 75 miles driven in 2017. As you can see, when it's on on it shows you everything so it shows you the dollar amount for the mileage that you've driven so far this year, how much of a deduction you've received. It also shows you the total number of miles But once again, if he wants a break back down to see how many of those miles are for personal purposes we'll click on here. And it shows us that 75 miles are personal. And as you can see, personal miles are not deductible.

So this, this figure here is always going to be zero. So for unreviewed miles as you can see there is no data on the screen. And under the mileage transactions only show up if you have the QuickBooks self employed app set up on your phone. Now in addition to having it set up on your phone, you also have to turn on the tracking feature. You can actually set the app to automatically track all of your miles whenever you are driving from point A to point B on any given day. At the end of the day, you can then go back and review these trips using either your phone or your laptop.

And you can separate your personal mileage from your business mileage for any given day or time period. This particular feature is really useful for people who don't remember to record their mileage. So if you don't want to have to go through the process of constantly recording your mileage every time you go somewhere, then you can actually just use this feature. So whenever you leave your house, whenever you're driving, you're being automatically tracks, your mileage has been automatically tracked, tracked, and you can go back and do the separation. So when you come into the unreviewed section here, you're going to see all the drugs that you have done for that particular day. And then you can go ahead and pick a cable.

Was this part of my driving leg personal or was it business and you can sort it in this particular area. And as I said earlier, you can also use your phone to do the exact same thing, use your phone to swap between business and personal miles. Second, we have the date. So let's take this back to all all of our minus transactions. Then we have the date, this is just a date range, either by the year or by a custom date. So right now we're looking at, I believe, 2001 that we're actually looking at everything all the years combined.

So let's click on 2017 and see what we come up with. So for 2017, you can see how the number of miles driven changed. And also the mileage amount change, because now we're only looking at one particular yet, if you want to look at 2016, you will click on 2016. And it will show you the 16 how many miles you drove in 2016. And how much of the miles that you drove is deductible. And then if you want to do a custom date, so you click on custom date, so we're looking at October 15 2017, and we go ahead and apply that and it's going to show you nothing, so which means October 15 2018 17 there were no miles driven.

So if you want to change the custom date, and let's say he wants to look at year to date, so 2002 thousand October 2016 on the 15th to October 15 2017, we want to look at that time period, we can apply that, for the custom date shows us from 2015 2016 October 15 to 2017 October 15. We have driven 362 miles, and we have gathered $154 in mileage deduction. So let's take this back to all. And then another really neat feature that QuickBooks self employed has is the emailing feature. So if you need to email your driving log to your CPA or your accountant, you can click on email and then you can go ahead and include your accounts of email address, I'll email it to myself. That's my email address.

And then I will click on Send Email. And what happens is you just sent your mileage log to your accountant or CPA and this is a really great feature for the end of year so that way your, your accountant doesn't have to ask you but how many miles Did you drive Give me your mileage information for the year. You just automatically send it to them and they haven't. And then also if you would like to and as you can see just came in here it is. This isn't like just emailed myself. And see another thing you can do is you can actually download a copy of your mileage.

So you can click on this tab here which says download and then it shows up in a an Excel format. You click on the Excel link and here you have it. So it gives you the dates cause whether or not it's a business, business or personal. It tells you the type of trip. Of course you're the type of vehicle you have. And then the distance, the mileage and also how much introductions you have to see.

Okay, so this is a really neat feature for personal purposes. If you want to keep this on file for yourself, what you'd like to send it to whomever. So let's x out of this. to record an actual trip you're going to start by clicking on Add trip. Once you click on Add trip, you're going to come to the dates and you're going to record whatever date if you add in the trip for two, let's assume that we're adding the trip for October 10. We can change that date to October 10.

Now we're going to, we're going to include a starting point. So we'll do a starting point. Let's say we came from 123 Main Street. And the city is let's say it's Atlanta. And we've got the states and the area code I'm sorry, zip code, we will add that the ending address we went to 157 Peters street in Atlanta as well. And then we're going to also add that now if for some reasons I know for me, I usually forget to even set my my mileage, my odometer to let me know how far of a distance I drove, let alone How far with this took me to come back.

So if I didn't remember to keep an eye on my mileage, what I normally do is I'll go to something like a Google Maps. And I'll key in the starting address and the ending address. And usually that provides you with how many miles it's going to take you to get from point A to point B. So I'll just use that information and use it to record my mining. So if I went into Google Maps, and I keyed in 123, Main Street 2157 Pizza Street and let's say the mileage is 30 miles, okay, so it took me 30 miles to get from point A to point B. And if I came back from pizza Street to Main Street, that's another 30 miles, that's going to be 60.

So I'll include the mighty chair at 60 miles and of course this business for that stays the same. And then on the trip purpose, I would say went to visit a client Once a client, and then I will save it. So now you can see that that particular entry that I just created for October 10 2017, I got a the mileage was 60 miles and my tax deduction for that particular trip was $32 and 10 cents. Now let's say for example, I accidentally recorded a trip as personal and it should have been business, I can easily go back and change that. So you can see October 15, there was a trip made for 35.03 miles which was a personal trip, but then I determined afterwards that that was actually a business trip, when I have to do is click on personal and then change that to business.

And save and then of course, you're going to include a trip purpose which is already here, which is meeting with client Michael Jim Save that. And now you can see, it's gone. It went from a personal trip to a business trip so that those 35.3 miles now has given me a tax deduction of $18 and 75 cents. So using QuickBooks self employed to record mileage is pretty simple. The important thing is that you actually remember to do it, and that you set things up. And it's really important that you you maintain a mileage log because one of the most common audit areas for the IRS is mileage.

It's such an easy transaction to abuse. And because you can make so much money by recording your mileage. It's an easy item to abuse. So the IRS IRS, they do pay particular attention to mileage. And if you record mileage and you don't have a mileage log, then Nine times out of 10, the IRS may deny it. So if you were able to accumulate $20,000 in mileage deductions for a particular year, but you have absolutely no recorded information showing, you're showing your mileage log, then the IRS, they don't know whether or not you actually, those miles were real, or they were just made up.

So it's really important not just to have this feature, but you need to also use it to make sure that you are you are keeping and maintaining, maintaining a mileage log, which which, like I said, will help you if you ever get audited, but besides even getting audited, you can get huge deductions from mileage. So don't leave it on the table. Make sure you utilize the mileage aspects of QuickBooks self employed. In this lesson, we learned how to set up our vehicles in QuickBooks. self employed and how to record our auto miles. We also learned how to email a copy of our mileage log to our CPA or our accountant.

In the next lesson, we're going to learn how to calculate and pay estimated taxes.