What’s Better For Taxes: Physical Paper Log vs Digital Log

Find out how to increase your tax returns by choosing the right type of mileage log for you. The most common ways are a paper logbook or a digital one in a Spreadsheet or an app.

If you plan on getting reimbursement for your mileage, then you need to keep a logbook. There are a couple of different options out there but the most common ones are still a paper logbook or a digital one in the form of an Excel Sheet, Sheets Spreadsheet or an application for your phone. 

Mileage Log Requirements

Depending on where you are located, you need to consider the requirements set by your local authorities. For the US, that’s the IRS and for Canada it is the CRA. The IRS  requires your log to contain the following:

  • The mileage of each trip
  • The date of each trip
  • The location you drove to 
  • The reason for your trip

Whichever option you choose for your logging, you will need to input all of this in order to get your reimbursement. On top of that, you must always include your odometer reading at the start and end of your log and make sure to log the odometer whenever you change your vehicle.

Pros and Cons of a Physical Logbook

Pro: The main advantage of a paper mileage log is that it is very inexpensive to begin with. A paper mileage log should also satisfy the IRS’s documentation requirements if you ever face an audit.

Con: Keeping a physical logbook can be very time consuming as you need to input all information manually. You need to manually log the date, location, miles driven and reason. You also need to always remember to write down your trip before it is too late – always log a trip not longer than a week after it happened.

Another con is that you need to do all the calculations manually keeping track of the current IRS mileage rates (or CRA if you are in Canada) and applying them correctly. 

Pros and Cons of a Digital Logbook

Pro: One of the best things about using a digital logbook is that you don’t have to remember to start and finish tracking; simply drive as usual, and a mileage record will be generated for you. If you leave your phone at home and forget, most apps will usually allow you to add things manually as well. 

Pro: Your miles are extremely valuable. But only if you keep proper track of all of them. A paper mileage log may lead to you forgetting to deduct the miles you are entitled to. You will likely save up more by using a digital logbook but only if you use it correctly. At the end of the day, you can save up with both if you use them properly – the physical logbook just takes more time

Pro: Save time by spending less time manually logging things. Most apps nowadays are so automated when it comes to tracking that you will have to do a lot less work compared to a physical logbook.

Con: They may not be free. While many apps offer free versions, most are not entirely free. If you are looking for a free alternative, the best for you may be a Sheets Spreadsheet or an Excel File. Just remember to always back up so you don’t lose your log. However, considering the automatic tracking apps offer, as you may save up quite a bit by using them – they may end up paying for themselves.

How to calculate the reimbursement when using a physical or digital logbook

The process is the same for both. If you use an app, your calculation will likely be automatic. If you use a physical logbook then you need to first make sure you’ve been keeping track of your mileage throughout the year. You’ll need the total number of miles driven for business as well as the standard IRS mileage rate (or CRA). Using a calculator, simply multiply the miles by the IRS mileage rate to determine the amount of the deduction you can claim.

Whichever method of logging you pick, the most important thing is to be diligent about your mileage logging and you will likely receive all the reimbursement you should. 

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