Start by separating business use from personal use. This is the single most important thing. If you drive a truck to job sites Monday through Friday and then use it for personal errands on the weekend, you need to know what percentage is business versus personal. The IRS requires this distinction, and guessing at year-end doesn’t hold up in an audit.

For vehicles, you have two deduction methods. The standard mileage rate lets you deduct a set amount per business mile driven (67 cents per mile for 2024). The actual expense method lets you deduct the business-use percentage of gas, insurance, repairs, tires, oil changes, registration, and depreciation. You generally pick one method when you start using a vehicle for business, and the standard mileage rate is simpler for most skilled trades owners. But if you drive a heavy-duty truck or have high repair costs, actual expenses might save you more.

Use a mileage tracking app like MileIQ or Everlance. Turn it on and let it run in the background. Every trip gets logged automatically and you just swipe to classify it as business or personal. Trying to reconstruct a year of driving from memory is a waste of time and won’t produce reliable numbers. Do it as you go or don’t bother claiming it.

For equipment and tools, the tracking depends on the cost. Small tools and supplies under a few hundred dollars can usually be expensed immediately. Larger purchases like a $5,000 generator, a trailer, or a skid steer are capital assets. You can often deduct the full cost in the year you buy it using Section 179, but the purchase still needs to be recorded as an asset in your books so depreciation is tracked correctly. Your accountant will handle the tax treatment, but you need to give them accurate records of what you bought, when, and how much you paid.

Keep a running list of every piece of equipment you own with the purchase date and cost. This is your asset register. When something breaks and you replace it, note that too. This matters for insurance claims, tax deductions, and knowing the true cost of running your business.

Save every receipt digitally. Take a photo with your phone the day you buy fuel, parts, tools, or pay for a repair. Apps like Dext can pull receipt data directly into QuickBooks. Paper receipts from auto parts stores and gas stations fade fast, and a faded receipt is the same as no receipt if you ever get audited.

If you’re running jobs, try to code vehicle and equipment expenses to specific projects when it makes sense. Renting a trencher for the Martinez job? That’s a direct job cost, not general overhead. Fuel for driving between three different sites in a week? That’s harder to allocate and can stay in general vehicle expense. The more you can tie to specific jobs, the better you understand which projects are actually profitable.

Reconcile these expenses weekly or at minimum every two weeks. Letting vehicle and equipment charges pile up for months means you forget what was business, what was personal, and which job it belonged to. A quick weekly review keeps everything accurate without becoming a burden.

The real payoff of proper tracking goes beyond tax deductions. When you know what your trucks, trailers, and tools actually cost you per month, you can price jobs more accurately. Most trades business owners underestimate their vehicle and equipment costs because they never add it all up. Accurate bookkeeping services turn those scattered expenses into numbers you can actually use to make better decisions about when to replace equipment, whether to buy or lease, and what to charge customers.