Businesses, contractors and self-employed people need to keep track of expenses and mileage for accounting and tax purposes. New apps for smartphones aim to take much of the work out of the recordkeeping.
One expense reporting app that has reached over one million users is Everlance. It ranks one of the highest apps downloaded for such purposes from the Apple App Store. Created in 2015 by Stanford MBA graduates Alex Marlantes and Gabriel Garza Rodriguez, the app integrates with banking accounts and credit cards and it even uses the smart phone’s GPS capability to automatically track mileage.
Mileage is an important deduction or billing opportunity that businesses and freelancers can sometimes miss because of the work involved. The IRS has set its 2020 standard mileage rate for the use of a vehicle for business use at 57.5 cents per mile, which makes it pricy to ignore in businesses that have a high number of miles driven.
The idea for the app came about because Marlantes’ father is a novelist and kept a paper mileage log in his glove box. “All this accounting stuff is imposed upon self-employed people and a lot of creative pursuits are self-employed and we thought if there was a way to do this automatically, that would really resonate with busy people,” Marlantes said.
Some of the most common users of apps like Everlance are real estate agents, Uber and Lyft drivers, personal shoppers, contractors, artists, photographers, writers and editors. Natacha Friche, a personal shopper for Instacart, drives more than 13,000 miles per year for the clients she serves. That adds up to a little more than $7,500 per year in mileage alone. “The app is quick and easy and saves me a bunch of time because I can just export my mileage and expenses to my accountant without having to manually track them,” Friche said.
“We launched Everlance to replace the two most common ‘technologies’ used for documenting business expenses and mileage—the shoebox of receipts and the paper mileage log,” said Marlantes, the CEO of Everlance. Before the app was created, Friche was tracking her expenses and mileage manually and stated she was missing out so many times because she would forget to write down her trips that were work-related.
Lindsey Anne Belliveau drives an average of 20,000 miles per year for her business, L.A. Birdie Photography LLC in Baltimore, Maryland doing family photography, weddings and events. She uses an app called MileIQ, which keeps track of mileage only, when she drives for work.
“I used to catalog all my experiences and things just became too complex,” Belliveau said. She keeps track of other expenses in Quickbooks and uses a bookkeeper to sort through the expenses each year.
Despite a long list of available apps for expense reporting, including Everlance, MileIQ, QuickBooks, Expensify, Taxbot, Wave, FreeAgent and Hurdlr, Virginia Sine, owner of Sine Strategies LLC, won’t give up her spreadsheet. Sine specializes in helping nurses pass the state board exams and tutors them for nursing school courses.
“I did not prefer using an app because it was just one more thing for me to figure out how to use,” Sine said. She keeps track of her expenses using an Excel spreadsheet such as her nursing license, web site fees, computer upkeep and the conference rooms where she meets her students.
Amy Loomis, a registered tax preparer and owner of Towson Tax and Consulting in Maryland, said many self-employed people forget to deduct their mileage, home office deductions, internet, utilities and qualified-business or pass-through entity deductions and expenses.
“No matter if you use an app, do it by hand or use a program such as Excel or QuickBooks, all receipts must be kept either hard-copy or digitally for any expense over $75,” Loomis said.
An exception is hotel expenses, for which the IRS requires all receipts, regardless of cost, she said.