Author: Marcela De Vivo

Filing for the 2024-25 Form 2290 Season Starts Now, Truckers!

Posted on July 18, 2024 by - Uncategorized

File ahead of the rush with ExpressTruckTax

The 2290 filing season is upon us, and our team is more ready than ever to help you get ahead of the game this year! That’s right, the 2024-25 Form 2290 is now available from ExpressTruckTax. Starting your filing process early avoids any last-minute hassles and stress. Why not take advantage of this opportunity to file accurately and on time?

A Quick Recap of Form 2290

We understand that dealing with tax forms isn’t something you do every day, even if it’s our daily bread and butter here at ExpressTruckTax.

IRS Form 2290 is crucial for owners of commercial motor vehicles that weigh 55,000 pounds or more. This form calculates and pays the annual heavy vehicle use tax (HVUT). The HVUT tax year runs from July 1 to June 30, meaning that each summer, it’s time to file Form 2290 for the upcoming tax period.

The Benefits of Filing Early

Completing your Form 2290 filing well ahead of the August 31st deadline has several significant advantages:

  • You can rest easy knowing this critical task has been completed. Then, you can focus on your daily operations without the stress of a looming deadline.
  • Millions of truckers scramble to meet the August deadline, which can lead to delays and system slowdowns. Filing early means you’ll have your Stamped Schedule 1 well before the rush.
  • You’ll have ample time to address and correct any issues with your filing without risking late penalties.
  • Forms filed early are processed as soon as the IRS accepts them, ensuring prompt confirmation of compliance.

Why Choose ExpressTruckTax?

A more fitting question might be: Why would you choose anyone else to handle your 2024-25 Form 2290 filing?

ExpressTruckTax has been a trusted name in the industry for over a decade, offering the simplest and most affordable way to file your 2290. Here’s why we stand out:

  • Our platform is designed to be user-friendly, guiding you through the filing process step-by-step.
  • We provide a cost-effective solution without compromising on quality or service.
  • Our customer support team is not only live and local but also bilingual. They are ready to assist you Monday through Friday from 8:30 AM EST to 5:30 PM EST via phone, email, or live chat.
  • With years of experience, we ensure that your filing is accurate and compliant with IRS requirements.

Are you ready to start filing now? Click the button below to get started with ExpressTruckTax today and experience the ease and reliability thousands of truckers trust yearly!

IRS Form 2290 FAQ

What is Form 2290?

Form 2290 is an IRS tax form used to calculate and pay the Heavy Vehicle Use Tax (HVUT). This tax applies to commercial vehicles that weigh 55,000 pounds or more. The tax helps fund highway infrastructure by taxing those vehicles that cause the most wear and tear on the roads.

Who Needs to File Form 2290?

Anyone who owns a heavy highway motor vehicle with a taxable gross weight of 55,000 pounds or more must file Form 2290. This includes:

  • Individual Owners: If you own and operate a qualifying vehicle.
  • Businesses: Companies that own fleets of heavy vehicles.
  • Agricultural Operators: Farmers who use heavy vehicles primarily for agricultural purposes may be subject to this tax but might qualify for reduced rates.

When is the Deadline to File Form 2290?

The deadline to file Form 2290 is August 31st each year for the tax period that runs from July 1st to June 30th. If you acquire a vehicle after the start of the tax period, you must file Form 2290 by the last day of the month following the month of first use.

What is a Stamped Schedule 1?

A Stamped Schedule 1 is proof of payment for the Heavy Vehicle Use Tax. This document is required to register your vehicle with your state’s Department of Motor Vehicles (DMV). Once you file Form 2290 and pay any taxes due, the IRS will send you a stamped Schedule 1.

Are There Any Penalties for Late Filing?

Yes, if you do not file Form 2290 by the deadline, you may be subject to penalties and interest. The penalty for failing to file the form is generally 4.5% of the total tax due, assessed on a monthly basis up to five months. Late payment penalties are usually 0.5% of the total tax due per month, plus interest.

Can I File Form 2290 Electronically?

Yes, the IRS allows electronic filing (e-filing) of Form 2290. E-filing is faster and more efficient than paper filing. ExpressTruckTax provides an easy-to-use platform for e-filing, ensuring that your form is submitted accurately and promptly.

How Do I Calculate the HVUT?

The Heavy Vehicle Use Tax is calculated based on the vehicle’s taxable gross weight. Vehicles weighing between 55,000 and 75,000 pounds are taxed at a rate of $100 plus $22 per 1,000 pounds over 55,000 pounds. Vehicles over 75,000 pounds are taxed at a maximum rate of $550 per year.

Are There Any Exemptions to Filing Form 2290?

Certain vehicles are exempt from the HVUT, including:

  • Logging Vehicles: Trucks used exclusively for transporting logs are taxed at a reduced rate.
  • Agricultural Vehicles: Trucks used primarily for farming and driving less than 7,500 miles per year (5,000 miles for non-agricultural vehicles) are exempt.
  • State and Local Government Vehicles: Vehicles owned and operated by state or local governments are exempt from the HVUT.
  • Charity Exemption: Some nonprofit charities may be exempt from the HVUT. An organization must be recognized as a nonprofit under Section 501(c)(3) of the Internal Revenue Code. The vehicle must be used primarily for providing charitable services.

What Should I Do If I Sell My Vehicle During the Tax Period?

If you sell your vehicle during the tax period, you may be eligible for a partial refund of the HVUT paid. You need to file Form 8849 to report the sale and claim the refund for the remaining months of the tax period.

How Do I Correct a Mistake on My Form 2290?

If you make a mistake on your Form 2290, you can file an amended return to correct the error. Common corrections include changes to the vehicle identification number (VIN) or the gross taxable weight of the vehicle. ExpressTruckTax can help you file amendments quickly and accurately.

What Records Do I Need to Keep?

The IRS requires you to keep records of your Form 2290 filings for at least three years after the date the tax was due or paid, whichever is later. These records should include:

  • Copies of Filed Forms: Keep copies of Form 2290 and Schedule 1.
  • Proof of Payment: Maintain evidence of tax payment.
  • Vehicle Records: Keep records of vehicle purchases, sales, and mileage.

How Can I Pay the HVUT?

The HVUT can be paid electronically using the Electronic Federal Tax Payment System (EFTPS), by credit or debit card, or by check or money order. ExpressTruckTax offers guidance on making electronic payments to streamline the process.

Comprehensive Guide to Truck Driver Expenses

Posted on May 1, 2024 by - truck driver

Truck driver expenses are a critical factor in the demanding world of long-haul transportation. From fuel and maintenance to compliance, taxes, and tech solutions, there is a lot to track. Understanding these financial aspects is essential for drivers, owner-operators, and fleet managers.

Our Guide to Truck Driver Expenses unravels the fiscal intricacies of the industry. Whether you’re a new driver, owner-operator, or fleet manager, you need practical tips to manage your budget.

Trucking Company Expense Categories

There are many items that can be deductible expenses for a trucking company or owner-operator. We’ll list here some of the most common, but companies may have different expenses depending on their unique situations.

Vehicle and Maintenance Costs

One of the biggest expenses that any trucking company incurs is related to their largest assets — the trucks that make up their fleet. These costs include the purchase or lease of vehicles and trailers and any expenses related to maintenance. Fleets can even deduct expenses related to depreciating property as the value of these assets declines over time and with use.

Insurance

Trucking companies often carry a wide range of insurance types, including but not limited to:

  • Motor truck general liability
  • Motor truck cargo
  • Physical damage coverage
  • Non-trucking liability
  • Heavy truck roadside assistance
  • Rental reimbursement with downtime
  • Trailer interchange agreement
  • Limited depreciation coverage
  • Mechanical breakdown insurance
  • On-hook coverage

Premiums for business insurance coverage can be deductible expenses come tax time.

Licenses

Any fees paid related to licensing for a trucking company are deductible expenses as well. This includes fees related to CDLs, USDOT numbers, motor carrier numbers, business entity fees, and any specialty fees needed to conduct business.

Taxes

Trucking companies pay taxes on highway use, fuel, and vehicle purchases. Owner-operators also have income taxes and self-employment taxes. Fortunately, many taxes paid throughout the year can also be business tax deductions. 

Other Operational Costs

Other operational costs a trucking company may incur include:

  • Fuel
  • Office expenses
  • Payroll and employee benefits
  • Phone and internet costs
  • Banking, loans, and credit card fees
  • Uniforms and laundry
  • Any other costs required to conduct business
Tax Deductions for Truckers

How to Calculate and Manage Tax Deductions for Truckers

The keys to getting the most out of trucking tax deductions are organization and documentation. By carefully calculating and tracking expenses throughout the year, you’ll have a far easier time claiming them as deductions come tax time.

There are two basic requirements for all tax deductions. 

  1. The expense must have a valid business purpose.
  2. The expense must have proper documentation.

Additionally, any expenses used for both personal and business use must have proper proportional allocation or pro rata. This means that if the expense is used only 25% for business purposes, you can only deduct 25% of that expense.

Trucking Expense Sheet

One of the easiest ways to organize and manage trucking expenses is by using a trucking expense sheet. There are many free templates available online, but they may be missing valuable deductions. 

Instead, consider subscribing to a trucking management software solution like TruckLogics. This will help you track expenses and claim deductions while offering other benefits like a trucking dispatch system, driver management system, and load board. Best of all, there are packages for any size business, from owner-operators to large fleets and brokers. 

FAQs 

What expenses can a truck driver claim?

There are many expenses that a truck driver or trucking company can claim as tax deductions. These include expenses related to their trucks and maintenance, insurance premiums, taxes and fees, and other operational expenses.  

How do I categorize my trucking business expenses?

This will vary depending on your business and the expenses you incur. Some suggested categories include:

  • Maintenance
  • Fuel
  • Insurance
  • Taxes and fees
  • Meals overnight expenses
  • Equipment
  • Office supplies

What is included in a trucking expense sheet?

A basic expense sheet should list all of the categories of expenses you wish to track, along with plenty of space to track the date and cost of those expenses as they come up. It should also include a way to track large assets like trucks, trailers, office equipment, phones, etc. For these items, you should track both the cost of acquiring the equipment and the price you sell it for when you’re done using it or it’s time to upgrade.

Tax Implications of Leasing vs. Owning Trucks

Posted on February 15, 2024 by - 2290 tax, Uncategorized

Understanding the tax implications of leasing versus purchasing a truck is crucial for business owners and independent contractors in the transportation sector. This decision not only affects your company’s cash flow but also has significant consequences for your tax liabilities and financial planning.

Buying and leasing vehicles, equipment, or properties each have their distinct advantages and disadvantages, depending on your financial situation, needs, and preferences. Here’s a breakdown of the pros and cons associated with buying versus leasing:

Buying

Purchased trucks can be depreciated over their useful life, offering tax deductions over several years. The IRS allows for accelerated depreciation methods, such as Section 179 or Bonus Depreciation, enabling larger deductions in the early years of ownership. Also, if you finance the truck purchase, the interest portion of your loan payments may be tax-deductible. Finally, if you sell the truck for more than its book value, you may be subject to capital gains tax.

Leasing

For a leased truck, the entire lease payment can often be deducted as a business expense in the year it is paid, potentially providing a more immediate tax benefit than depreciation. Some high-value leases might have deduction limits under the IRS rules. It’s important to consult with a tax professional to understand the specific limits.

Exploring Truck Lease Tax Deductions

Leasing a truck can provide considerable tax benefits, primarily through truck lease tax deductions. This term is vital to understand and account for when deciding how to acquire a new vehicle for your business. When you lease a truck, you can generally deduct the following costs:

Lease Payments: A substantial portion of each lease payment can be written off on your taxes, which may reduce your taxable income.

Maintenance and Repairs: Typically, the costs associated with maintaining and repairing a leased truck are deductible.

Insurance Premiums: The insurance you pay for the leased truck can often be deducted as a business expense.

Licenses and Fees: Any licenses, registration fees, and taxes that are part of the lease agreement could potentially be deducted.

These deductions can be made annually for the duration of the lease, offering a predictable and immediate tax benefit. Unlike purchasing, where the upfront costs are higher and the depreciation deductions spread out over multiple years, leasing provides a more immediate return on investment through these deductions.

Truck lease tax deductions offer a compelling incentive for businesses to consider leasing over purchasing. The financial and tax benefits, combined with the flexibility of updating the fleet without sizable initial expenditures, make leasing an attractive option for many businesses in the transportation industry.

Tax Benefit of Purchasing a Truck vs. Lease

Purchasing a truck for your business comes with its set of tax benefits, primarily through truck purchase tax deductions. Understanding these deductions is crucial when deciding between buying and leasing a vehicle for your business operations. When you purchase a truck, you can take advantage of several tax deductions:

Depreciation 

  • Immediate Expensing: Under Section 179 of the IRS code, businesses can immediately expense the cost of a truck up to a certain limit in the year of purchase, subject to phase-out limits based on the total amount of qualifying equipment purchased during the tax year.
  • Bonus Depreciation: This allows businesses to deduct a significant portion of the purchase price of the truck in the first year, with the percentage varying depending on the current tax law.
  • Standard Depreciation: For the truck’s cost not covered by Section 179 or Bonus Depreciation, you can depreciate the truck over its IRS-designated useful life (typically over a 5-year period), spreading out the tax benefits.

Loan Interest

If you finance the truck purchase, the interest portion of your loan payments is typically deductible as a business expense, reducing your taxable income.

Operating Expenses

  • Maintenance and Repairs: Costs incurred for the maintenance and repairs of the truck are tax-deductible.
  • Insurance Premiums: Premiums paid for insuring the truck can be deducted as a business expense.
  • Fuel: Fuel costs for business use of the truck are deductible.
  • Licenses and Fees: The costs for licensing, registration, and taxes related to the truck can be deducted.
  • Upgrades and Improvements: Costs for upgrades or improvements made to the truck can often be depreciated over their useful life, offering additional deductions.

These deductions can significantly offset the cost of purchasing a truck by reducing the taxable income of your business over the life of the truck. Unlike leasing, where deductions are primarily focused on lease payments and related expenses, purchasing allows for a broader range of deductions over time. The initial tax benefits through Section 179 and Bonus Depreciation can be particularly advantageous for reducing taxable income in the year of purchase.

Choosing to purchase a truck may involve higher upfront costs compared to leasing, but the long-term tax deductions and the benefit of owning the asset outright can make it a financially sound decision for many businesses. It’s essential to consider your business’s financial situation, how long you plan to use the truck, and the tax implications of purchasing versus leasing when making your decision. Consulting with a tax professional can provide personalized advice tailored to your specific circumstances, ensuring that you maximize your tax benefits.

Navigating taxes as an owner-operator, whether leased to a company or under a lease purchase agreement, can be challenging. However, understanding the intricacies of your tax obligations and benefits can lead to substantial tax savings and a healthier financial status for your trucking business. Always consider hiring a tax expert to ensure you comply with current tax rules and optimize your tax position.

FAQ’s

Can truck lease payments be deducted from my business’s taxable income?

Yes, truck lease payments are typically deductible from your business’s taxable income as they are considered a business expense. The IRS allows the deduction of lease payments for trucks used in business operations, proportionate to their business use.

Are the lease payments for my company’s commercial trucks tax deductible?

For commercial trucks, lease payments are often fully deductible as a part of business expenses. However, if the truck is used for both business and personal reasons, the payments must be apportioned accordingly.

Do leased trucks incur federal excise tax?

Leased trucks do not usually result in federal excise tax liabilities for the lessee because the lessor typically shoulders this responsibility. The federal excise tax is applicable at the sale of certain heavy vehicles and is paid by the manufacturer or importer.

What are the tax strategy considerations when deciding to lease or buy fleet trucks?

When considering the tax strategy for fleet trucks, leasing can offer immediate tax deductions and financial flexibility, while purchasing provides depreciation benefits over time. Businesses should evaluate their specific financial needs and consult with tax professionals to devise an optimal tax strategy.

Tax Planning for Small Fleet Owners

Posted on February 1, 2024 by - express truck tax

The United States tax system operates on a pay-as-you-go basis, which means taxpayers are required to pay most of their tax during the year, as they earn or receive income. This requirement applies not only to employers, who withhold taxes from their employees’ paychecks, but also to individuals who are self-employed, such as owner-operator truck drivers. For these independent workers, the Internal Revenue Service (IRS) mandates the payment of quarterly estimated taxes.

Quarterly taxes are payments made every three months to the federal government and, when applicable, to state governments. Estimated tax payments are calculated based on the income that you expect to earn and the estimated tax liability on that income, including self-employment tax and any other taxes you are liable for.

The importance of Staying on Top of Tax Payments for Small Fleet Owners

Self-employed drivers must understand and respect this payment structure for several reasons:

1. Cash Flow Management: By paying taxes quarterly, owner-operators can better manage their cash flow, avoiding the pressure of a single, large tax payment at year-end.

2. Avoidance of Penalties: The IRS imposes penalties for underpayment of taxes. By correctly calculating and making quarterly payments, owner-operators can steer clear of these penalties.

3. Predictable Financial Planning: Knowing what and when to pay can help owner-operators plan their finances more predictably, contributing to overall business stability.

When preparing to make these estimated tax payments, owner-operators will need several forms. The key form for federal taxes is Form 1040-ES, “Estimated Tax for Individuals.” This form helps calculate the estimated tax required to be paid each quarter. If required by your state, a corresponding state-specific estimated tax form must also be completed.

Failure to meet quarterly tax obligations can have serious consequences, including:

Underpayment Penalty: If you do not pay enough tax through withholding or quarterly estimated payments, you may be charged a penalty for underpayment of estimated tax.

Interest Charges: Like any overdue payment, any unpaid taxes will accrarily interest until the balance is paid in full.

Compounded Debt: Continual failure to pay taxes can lead to a compounded debt that is more difficult to settle in the future, encompassing taxes, penalties, and interest.

For more information on self-employment taxes and current rates, owner-operators can refer to the IRS website.

Meeting the challenge of quarterly tax payments may seem daunting, but with careful financial planning and disciplined saving, owner-operators can ensure compliance with tax regulations, reduce the risk of financial shocks, and maintain focus on the road ahead.

Keeping Detailed Records of Expenses

Maintaining meticulous records of expenses is essential for proper tax preparation, primarily due to the need to substantiate any deductions claimed on tax returns. Precise records provide a clear account of all expenditures, helping to ensure that you are only paying taxes on your net income after legitimate business expenses are extracted. In the event of an audit by the IRS, comprehensive records will serve as your first line of defense, demonstrating that your deductions are valid and accurate.

Effective strategies for organizing and storing receipts include:

Digital Organization: Utilize mobile apps and cloud-based tools designed for expense tracking where you can upload and categorize receipts immediately after incurring an expense. Examples include QuickBooks, Expensify, and Receipt Bank.

Physical Filing System: Establish a well-labeled physical filing system with folders or binders sorted by month, expense type, or another logical categorization that works for your business operations.

Regular Reconciliation: Schedule weekly or monthly sessions to reconcile receipts with bank statements and credit card statements, ensuring that all expenses are accounted for and recorded correctly.

Types of Deductible Expenses

Deductible expenses are specific costs that are necessary and customary for the operation of your business. Common work-related expenses that owner-operators can deduct include:

Food: While on the road, meals are a necessary expense. However, the IRS only allows for partial deduction considering the personal nature of food consumption.

Fuel: Perhaps the most significant expense for truck drivers, fuel costs can be meticulously documented and claimed as deductions.

Lodging: Overnight stays while on long hauls are deductible, provided they are necessary for the completion of work.

Vehicle Maintenance: Regular maintenance and necessary repairs to ensure the safe and efficient operation of the truck are fully deductible.

Insurance Premiums: Insurance for the vehicle and cargo is not only prudent but also a deductible expense.

Licenses and Permits: Any fees associated with obtaining and maintaining required professional licenses and permits are deductible.

Equipment: Necessary gear, from safety equipment to electronics that facilitate your business activities, can often be claimed.

Depreciation: Owner-operators can deduct the cost of their truck and other capital assets over time through depreciation deductions.

Retaining receipts for all these expenses is critical, as they serve as proof that the expenditures were indeed made and relate to the operation of your business. It is important to note that personal expenses or any portion thereof cannot be deducted.

For more guidance on what constitutes a legitimate business expense and how to properly document it, owner-operators can refer to IRS Publication 463 (Travel, Entertainment, Gift, and Car Expenses).

In summary, meticulous record-keeping is pivotal for tax accuracy and compliance. By regularly tracking and properly categorizing every business expense, owner-operators can optimize their tax deductions, ultimately reducing their taxable income and potential tax liability while remaining prepared for any IRS inquiries. 

Exploring Tax Credits

Let’s review possible tax credits that small fleet owners can take advantage of:

COVID-19 Related Tax Credits

The outbreak of the COVID-19 pandemic led to significant economic disruptions, prompting the federal government to introduce a range of tax credits aimed at easing the financial burden for individuals and businesses. Understanding these credits is crucial for taxpayers, as they can substantially decrease the amount of tax owed and, in some cases, result in a refund.

The Families First Coronavirus Response Act (FFCRA): Initially provided paid sick leave and expanded family and medical leave for COVID-19 related reasons and created the corresponding tax credits for eligible employers. Tax credits for sick and family leave can be claimed for wages paid for leave taken due to COVID-19 reasons, including quarantine and vaccination.

Employee Retention Credit (ERC): Originally introduced under the CARES Act, the ERC encourages businesses to keep employees on their payroll. While the availability of this credit has changed over time, it can cover a percentage of wages and health insurance costs paid to employees. Eligibility has evolved, with varying criteria for different periods during the pandemic. It’s essential to review the updated guidelines to determine if your business can still benefit from this credit for past payroll periods.

Recovery Rebate Credit (Stimulus Checks): Taxpayers who did not receive the full amount of the Economic Impact Payments (stimulus checks) may be eligible to claim the Recovery Rebate Credit on their tax return. If the full Economic Impact Payment was not received, a reconciliation on the tax return could lead to additional credit, reducing the tax liability or contributing to a tax refund.

Charitable Donations:

Charitable contributions can play a transformative role in reducing tax obligations for taxpayers who itemize deductions. However, the rules surrounding charitable deductions are nuanced and demand careful consideration.  To be deductible, donations must be made to qualifying organizations as outlined by the IRS. Not all organizations with a charitable purpose will meet the criteria for a tax-deductible contribution.

Itemizing vs. Standard Deduction: Taxpayers must itemize deductions on their tax returns to deduct charitable contributions. This may be beneficial if total itemized deductions exceed the standard deduction for the filing status.

Documentation and Limits: Proper documentation is required for all charitable donations, including receipts from the charitable organization, bank records, or a written acknowledgment for gifts valued at $250 or more. There are limits to how much can be deducted in a given year based on a percentage of the taxpayer’s adjusted gross income (AGI), with any excess potentially carried over to subsequent tax years.

Appreciated Assets: Donating appreciated assets, such as stocks or real estate, can provide additional tax benefits. Taxpayers may be able to deduct the fair market value of the asset while avoiding capital gains taxes that would have been incurred if the asset had been sold.

By strategically engaging with tax credits and maximizing charitable donations, taxpayers can effectively manage their taxable income. However, it is recommended to consult with a tax professional to ensure compliance with the complex tax laws and to optimize the benefits these provisions offer.

In conclusion, understanding and efficiently managing tax obligations is essential for owner-operators and small fleet owners in the United States. By adhering to the pay-as-you-go system through quarterly estimated tax payments and maintaining meticulous documentation of deductible expenses, these independent workers can avoid penalties, manage cash flow effectively, and plan their finances predictably. 

Additionally, exploring available tax credits, especially those related to recent developments like the COVID-19 pandemic, as well as maximizing charitable contributions can significantly lower tax liabilities. Diligence in record-keeping and strategic financial planning are critical for ensuring compliance, optimizing deductions, and securing a stable financial future in the competitive and demanding environment of the trucking industry.

Maximizing Savings: A Complete Guide to Truck Driver Tax Deduction

Posted on January 15, 2024 by - Truck Driver Tips

The nature of trucking demands both long hours on the road and significant spending on work-related items. Expenses range from vehicle maintenance and repairs to travel costs—all of which can add up. Recognizing these expenditures as eligible deductions can be the difference between an overwhelming tax bill and a manageable one. This financial literacy extends beyond mere money-saving; it’s about empowering each trucker to make informed decisions that align with their professional and personal financial goals.

Understanding Standard vs. Itemized Deductions

For truck drivers, tax preparation begins with the crucial decision between taking the standard deduction or itemizing deductions. The standard deduction is a fixed amount set by the IRS that can be subtracted from your income, making the remaining income subject to taxation. As of the latest tax guidelines, the standard deduction for single filers or married individuals filing separately is $12,950, for heads of households, it’s $19,400, and for married couples filing jointly, it’s $25,900, with adjustments being made annually for inflation.

Alternatively, itemized deductions involve meticulously listing eligible expenses that you’ve incurred throughout the tax year. These can include work equipment, truck repairs, and other unreimbursed business expenses that are commonplace for truckers. For many in the trucking industry, itemized deductions can surpass the standard deduction amount, leading to greater tax savings. However, this route demands detailed record-keeping and can result in a more complex tax filing process.

To decide which option serves you best, it’s advisable to calculate your deductions both ways. A truck driver should choose the method that results in the lowest amount of taxable income, hence reducing the tax liability.

In-Depth Documentation and Record-Keeping

When it comes to itemizing deductions, thorough documentation is non-negotiable. The IRS requires proof of every claimed expense, meaning truck drivers must keep a detailed log of their expenditures throughout the year. Here are the types of records you should maintain:

  • Receipts for Expenses: These include fuel, repairs, maintenance, tolls, and other work-related items.
  • Logbooks or Electronic Logging Devices (ELDs): Records of distances traveled, as the IRS allows deductions based on miles driven for business purposes.
  • Bank Statements and Credit Card Receipts: To validate that expenses were indeed paid.
  • Bills of Lading: To establish the context of travel and work completed.

A reliable system of organization ensures that you can confidently account for your deductions. Precise record-keeping not only supports legitimate deductions but also provides a defense should the IRS question any claim. Additionally, good records can highlight areas where costs could be managed more efficiently, allowing for strategic financial planning.

Record-keeping Tips for Truck Drivers:

  • Organize Receipts: Keep your receipts sorted by date or category for easy access during tax preparation or in case of an audit.
  • Digital Backups: Use apps or cloud storage to take pictures of receipts and documents to create digital copies in case physical ones are lost.
  • Regular Summaries: Monthly or quarterly, summarize your expenses and income to avoid a backlog of documentation at the end of the year.

The choice between standard and itemized deductions, along with meticulous documentation, plays a pivotal role in tax preparation for truck drivers. By mastering the art of record-keeping and understanding the nuances of each deduction type, truck drivers can optimize their tax filings and potentially reap substantial tax savings.

Essential Truck Driver Deductions on Taxes

Understanding the array of deductions available to truck drivers is crucial for maximizing tax savings. These deductions are designed to reflect the unique costs associated with truck driving and can significantly decrease a driver’s taxable income. Below we delve into the common deductions that are central to a truck driver’s tax filing, explaining the purpose and significance of each.

Travel Expenses:

  • Overnight Hotel Expenses: When truck drivers are required to rest between long trips, the cost of a hotel stay is deductible. The significance lies in the fact that these stays are often mandated by safety regulations and are, therefore, unavoidable expenses.
  • Meals: The cost of meals eaten during long-haul trips can add up. Truck drivers are entitled to a standard meal allowance or the actual cost deduction for meals. This deduction acknowledges the impossibility of home-cooked meals during extended travel periods.

Maintenance and Operation Costs:

  • Vehicle Repairs and Maintenance: Regular wear and tear on trucks mean frequent maintenance and repairs. Deductions for these expenses ensure that truck drivers are not unduly penalized for simply keeping their vehicles in safe, working order.
  • Fuel Cost: One of the most substantial expenses for truck drivers is fuel. Deducting these costs reflects the intrinsic role that fuel plays in a truck driver’s ability to perform their job.
  • Licensing Fees: Truck drivers must maintain a valid commercial driver’s license (CDL) and may be required to hold additional certifications. Deducting these fees recognizes their necessity for legal employment.
  • Union Dues: If a truck driver is a member of a union, the dues paid are deductible. This deduction is significant as it acknowledges the role that unions play in protecting drivers’ rights and interests.

Depreciation:

  • Depreciation on a Owned Vehicle: If a truck driver owns their rig, they can claim depreciation as a deduction, recognizing the loss of value as the vehicle ages and accumulates mileage.

Health and Wellness:

  • Medical Examinations: Regular medical check-ups are often required to ensure a driver’s fitness for the road. Deducting these exams underlines the importance of health in this demanding profession.

Insurance:

  • Truck Insurance Premiums: Insurance is a significant cost for owner-operators. The ability to deduct these premiums helps mitigate one of the substantial ongoing costs of the profession.

By providing these deductions, the tax system acknowledges the unique challenges faced by truck drivers and supports their financial stability. Truck drivers should carefully assess which deductions they are entitled to claim and should consult with a tax professional or IRS publications to ensure compliance with current tax laws. Effective record-keeping and understanding the relevance of each deduction are key to securing rightful tax savings and maintaining fiscal health in the trucking industry.

Office Expenses:

  • Home Office: If you use part of your home exclusively for business, you can potentially deduct a portion of your housing costs.
  • Mobile Phone and Internet: Costs associated with communications if they are used for business purposes.
  • Office Supplies and Equipment: Office furniture, computers, and other supplies used in the course of business.

Breakdown of the Truck Driver Meal Deduction

Understanding Per Diem Rates for Truck Drivers

Per diem rates are a daily allowance for expenses that truck drivers can claim while away from home on business. Instead of tracking every single meal receipt, truck drivers can use per diem rates to simplify their record-keeping and tax filing process. The General Services Administration (GSA) establishes these rates for various locations, reflecting the cost of meals and incidental expenses for different areas across the country.

  • Standard Per Diem: The IRS provides a standard per diem rate, which simplifies the deduction process by offering a flat rate for each day away from home. As of the 2021-2022 tax year, the standard rate for most small localities in the United States is $66 for meals and incidental expenses.
  • High-Low Method: In addition to the standard rate, the IRS also offers a high-low method for per diem rates. This method provides different rates for high-cost locations versus other areas, thereby more accurately reflecting the actual cost of meals in those regions.
  • Special Rates for Transportation Workers: Truck drivers and other transportation workers have unique per diem rates due to their mobile nature. These rates are typically higher than the standard rates to account for the challenges and costs of meals on the road.

You can find the most current per diem rates on the GSA’s website.

Clarifying the 80/20 Rule for Transportation Workers

The 80/20 rule refers to the percentage of meal expenses that truck drivers can deduct when calculating their taxes. For most taxpayers, the deductible portion of meal expenses is generally 50%. However, the IRS provides special considerations for workers in the transportation industry, which includes truck drivers who are subject to the Department of Transportation’s (DOT) hours of service limits.

  • Increased Deductibility: Under the Tax Cuts and Jobs Act (TCJA), for tax years 2018 through 2025, transportation workers can deduct 80% of their meal expenses while traveling. This higher rate acknowledges the irregular schedules and limited access to prepared meals that truck drivers face.
  • DOT Hours of Service: To qualify for the 80% deduction rate, the truck driver must be working under the DOT hours of service limits, which regulate the number of hours they can drive and require rest periods.

For more information on the special considerations for transportation workers, refer to the IRS Publication 463.

Documenting Meal Expenses and Per Diem Claims

Accurate documentation is crucial when it comes to claiming meal deductions using per diem rates. Even though the per diem method reduces the need for retaining every meal receipt, it is still essential to keep thorough records.

  • Travel Days: Track the days you are away from your tax home—the entire city or general area where your work is located—on trips that require rest, sleep, or relief from duty.
  • Per Diem Log: Maintain a logbook or digital record of travel that includes dates, locations, and the reason for the trips.
  • Partial Days: For the days you depart and return, you can claim 75% of the per diem rate for those travel days, in line with IRS guidance.

While per diem rates simplify the deduction process, they cannot be used if an employer reimburses meal expenses or provides an allowance that is part of taxable income. Truck drivers must choose between itemizing actual meal expenses or using the per diem rate, selecting the method that results in a greater deduction and aligns with their circumstances.

Maximizing the Meal Deduction

By utilizing per diem rates and understanding the 80/20 rule, truck drivers can effectively manage their meal deductions to positively impact their tax liabilities. Adopting a methodical approach to recording travel days and associating them with per diem rates can result in significant tax savings and a more streamlined tax preparation process. It is advisable to consult a tax professional or the IRS guidelines to ensure compliance and to make the most informed decisions regarding meal deductions.

Strategic Planning for Company Truck Drivers

To make the most of available deductions, company truck drivers should plan strategically throughout the tax year. This may involve timing expenses to coincide with periods of higher income or discussing with their employer the potential for an accountable plan for work-related expenses.

In summary, company-employed truck drivers must carefully navigate the landscape of tax deductions, paying close attention to eligibility, limits, and conditions imposed by tax laws. While the opportunity for deductions is more restricted for these employees compared to their self-employed peers, there remains scope to claim certain unreimbursed expenses. With a clear understanding of what is permissible and diligent record-keeping, company truck drivers can effectively manage their tax obligations.  

Staying Informed and Compliant

Ultimately, the aim of keeping informed about truck driver-specific deductions is twofold: to legally minimize tax liabilities and to ensure full compliance with the tax code. By understanding the intricacies of IRS documentation and staying updated on changes in tax laws, truck drivers can better navigate the complexities of their tax obligations.

It is always recommended to consult with a tax professional who has experience with trucking-related tax issues to get personalized advice and to interpret recent tax law changes. This professional insight can be invaluable in aligning tax strategies with current regulations.

By adopting a proactive approach to understanding and applying trucking tax deductions, drivers can ensure that they are making the most of their eligible expenses while keeping their tax filings accurate and lawful.

A Comprehensive Guide: How to Start a Trucking Company

Posted on January 1, 2024 by - ”start a trucking company”

If you’re a truck driver wanting to strike out on your own, you may wonder how to start a trucking company. Starting a business can be overwhelming if you don’t know where to begin, but it doesn’t have to be an insurmountable challenge. This guide will help you learn all about starting your trucking business and get it off on the right foot from the start.

Why Start a Trucking Company?

There are many reasons why you might want to start a trucking business. The industry is profitable, even in challenging times like the recent pandemic. It allows for a level of freedom and flexibility that is hard to find in many industries. And compared to many industries, trucking can be a simple business to begin. 

How much do trucking company owners make?

Wages for trucking owner-operators are variable depending on the part of the country where you start your business. According to ZipRecruiter, the national average is almost $250k annually, with some states offering as much as $30k more. But of course, expenses have to be taken into account.

As for gross profit, financing company Coastal Kapital notes that “On average, a full-time owner-operator trucking business’s industry-standard turnover figure will be around $100,000 and $140,000.” Generally speaking, long-haul trucking pays better than local businesses.

How to Start a Trucking Business

Starting a trucking business can be a lucrative venture, but it requires careful planning and execution. You must know how to secure the right vehicles and licenses, build a strong client base, comply with regulations, and file taxes properly. But even if you’ve never run a business of any sort before, with the right advice, you can get your trucking company going strong, starting from just a single truck.

Requirements to start a trucking company

Once you’ve decided you want to start a trucking business, there are a few things you’ll need to research before you get going. Carefully look into the opportunities available in your area and create a business plan. This should detail how your company will operate and what it will do. There are plenty of free example business plans available online, so read through several before you begin writing your own. 

How to start a trucking business with one truck

Once you’ve created your business plan, you’ll need to register a business name and obtain an EIN (employer identification number). You’ll also need a permit from the Federal Motor Carrier Safety Administration (FMCSA) to carry goods across state lines (if that’s your intention). If you plan to operate within ports and airports, you’ll want to secure a Transportation Worker Identification Credential (TWIC) card as well. Once all of these credentials are yours, it’s time to get started.

Unless you already own a truck, you’ll need funding to purchase one. Look into Small Business Authority (SBA) loans or freight factoring as a funding source. Alternatively, you may choose to lease a truck. Some truck leasing companies even offer lease-to-own plans that allow you to purchase the vehicle at the end of the lease. This will give you more time to come up with the funding to purchase your truck if that’s what you want to do.

Finally, you can decide how you want to market and build your business. Will you go through freight brokers, load boards, partnerships with other carriers, or business networking? Perhaps you want to utilize a combination of several methods. To ensure you retain customers and build business relationships, focus on offering good customer service and keeping your costs low to offer competitive pricing. Trucking management software like TruckLogics can help you ensure your business runs smoothly from day one.

The Real Cost of Starting a Trucking Business

Outside of purchasing a truck (which is not required as leasing opportunities are plentiful), starting a trucking business is relatively inexpensive compared to many other businesses. Trucker Daily estimates that you can start your business with as little as $6,000-$15,000. This includes the costs of licensing and other paperwork that you will need to get started. 

Potential Challenges and How to Overcome Them

So far, starting a trucking business sounds pretty simple. But there are some things to know about trucking before you get started.

First, there are many compliance requirements that you will need to meet in order to avoid fines and other penalties. Whether you’re operating under your own authority or someone else’s, you’ll need to stay on top of these requirements. There’s a thorough compliance checklist available from Schneider Owner-Operators. 

Next, you want to stay on top of your finances and plan for tax time. Fortunately, there are a lot of trucking expenses that qualify for tax deductions, but you must keep receipts from day one in order to claim them. You’ll also need to keep fuel and mileage records for IFTA filing, and you’ll need to file the Heavy Vehicle Use Tax once a year.

FAQs

How profitable is starting a trucking company?

Trucking is a very profitable industry with plenty of opportunities for newcomers. According to Boss Magazine, trucking companies can make an average profit margin between 2.5% and 6%.

Is it hard to start a trucking company?

While starting a trucking company may be time-consuming, it’s not actually very difficult. As long as you take the time to ensure you’re complying with all federal, state, and local transportation regulations, the rest should be fairly straightforward.

How do I start a trucking company and get loads?

There are several options for sourcing loads for your new trucking company. You may use load boards, freight brokers, partnerships and other business relationships, or even traditional marketing methods. 

How do I start a trucking business with little money?

The biggest expense when starting a trucking business is purchasing a truck. If you don’t have funding to do so, you can still start your business by leasing your truck or even entering a lease-to-own agreement.

Guide to Understanding IRS 2290 Payment

Posted on November 15, 2023 by - Uncategorized

IRS 2290 payment is a vital part of tax season for commercial truckers. Sometimes called the Heavy Highway Vehicle Use Tax, IRS Form 2290 assesses heavy vehicle taxes for vehicles that regularly operate on public highways. It ensures that truckers who regularly use highways within a given year must contribute to their upkeep and maintenance. 

IRS Form 2290 payment applies to all highway motor vehicles whose taxable gross weight is at least 55,000 lbs. It must be paid by anyone with such a vehicle registered in their name, whether an individual or organization. Failure to pay the tax can result in penalties of 4.5% of the total amount due or more as time goes on.

IRS Form 2290 Payment: A Detailed Look

If you’re new to the 2290 IRS payment or simply want a refresher, you’ve come to the right place. Below, we’ll go through IRS Form 2290, section by section. To file manually, follow these steps.

  1. Fill out your name, address, and employer identification number (EIN). 
  2. Check the appropriate box if you’re filing an address change, amended return, VIN correction, or final return. 
  3. Part I Figuring the tax: Start by computing your taxes on Page 2 of the form. Then, fill out Part I.
    1. a. Line 1 is the month for which you are filing. 
    2. b. Line 2 is the total you reached on Page 2, Column 4.
    3. c. Line 3 is for any additional taxes due to a change in taxable gross weight. If any of your vehicles fall into a new category due to increased maximum load, instructions for Line 3 are available on the IRS website.
    4. d. Line 4 is the total tax, found by adding lines 2 and 3. 
    5. e. Line 5 is where you can claim any credits due to you. If doing so, you must attach documentation to support your claim. 
    6. f. Line 6 is the balance due, calculated by subtracting Line 5 from Line 4. 
    7. g. Check the appropriate box on Line 6 stating whether payment is through EFTPS or a credit or debit card.
  4. Part 2 Statement in Support of Suspension: Check the appropriate boxes if applicable.
    1. Line 7 claims tax suspension based on the miles your vehicles will travel on public highways during the period.
    2. Line 8a declares your vehicles are not subject to the tax, except those listed. Line 8b is a space to record the VINs of any vehicles that no longer meet the parameters for suspension. Attach an extra page if needed.
    3. Line 9 declares any vehicles listed as suspended during the prior year that have since been sold or transferred. Include the details for these vehicles, including VINs, new owners, and date of sale. Again, attach an extra sheet if needed.
  5. List any third party you want to designate as a contact point for the IRS. 
  6. Sign the form, date it, print your name below your signature, and include your contact phone number.
  7. The last section is for the use of paid tax professionals. If this is not you, leave this portion of the form blank.

Once you’ve filled out the main form, move on to Schedule 1. There, you’ll fill out your basic information (name, address, EIN), the month of first use, and the VIN and category for each vehicle you’re reporting. Below, list the total number of vehicles reported, the number of vehicles for which this tax is suspended, then subtract suspended vehicles from reported vehicles. 

Sign and date Schedule 1 on the page titled “Consent to Disclosure of Tax Information” and include your printed name and EIN. Finally, fill out the payment voucher (Form 2290-V) with details of your payment, detach it, and send it to the IRS along with your IRS gov payments 2290 and documentation.

How to Make Your IRS 2290 Online Payment

If the above seems like a lot of work and too much paperwork for you, we have good news: you can also file your IRS 2290 payment online. By doing so, you’ll get your stamped Schedule 1 much quicker, allowing you to register your vehicles without a lengthy wait for the mail. 

To file your 2290 IRS payment online, you’ll need to first gather some information. Have your company’s information at hand, including your EIN. Next, gather the information for each of your vehicles including VIN and miles driven. 

Next, be sure you have your payment information ready. If you’re filing online, you’ll need to do so with the help of a third party. This means you’ll need to pay your taxes due as well as a small fee for online processing. This fee is typically a small price to pay for faster, simpler tax preparation and a quicker Schedule 1 turnaround time.

When choosing a third party to file your taxes, it’s important to consider the options available. Some offer only the simplest of services, while others offer features that will ensure accurate filing and fast processing. Sites like expresstrucktax.com offer money-back guarantees, a VIN checker, VIN corrections, and full support for any questions or problems you may encounter. 

Troubleshooting Your IRS 2290 Payment Online

There are a few common issues you might run into while making your 2290 payment online. These include:

  • Employer identification number and business name do not match
  • Banking details are entered incorrectly
  • Duplicate VINs 
  • Duplicate Form 2290 online filing

If the IRS rejects your Form 2290 for any reason, you will receive an email explanation of the rejection. This email will also include instructions for correcting your errors. Be sure to make the prescribed corrections efficiently so you don’t incur penalties for late or missed filing. 

IRS Gov Payments 2290: Additional Information and Resources

The IRS has a number of helpful resources you can review to ensure you’re correctly filing your truck taxes. 

FAQs on 2290 IRS Payments

What is the IRS 2290 payment?

IRS Form 2290 is also called the Heavy Highway Vehicle Use Tax. It’s a tax on heavy vehicles that regularly use the nation’s public highways. 

How to make the IRS 2290 payment online?

To pay your Form 2290 taxes online, you’ll need an intermediary. Select a site such as ExpressTruckTax to help you with your filing. Through such sites, you can typically pay your taxes via credit card, debit card, or electronic funds transfer. 

Why is the IRS 2290 payment necessary?

Anyone regularly operating a heavy vehicle (of at least 55,000 lbs.) on US highways must file IRS Form 2290. Once the form is accepted by the IRS, you’ll receive the stamped Schedule 1 you’ll need to register your vehicles in most states. Failure to file means hefty penalties of 4.5% of the amount due and more as time goes on. 

Who should make the IRS 2290 payment?

Any individual or company who has a heavy vehicle (weighing 55,000 lbs. or more) that regularly drives on public highways registered in their name must file an IRS Form 2290. 

How to troubleshoot issues with the IRS 2290 online payment?

If there are any problems with your IRS Form 2290, you’ll receive an email from the IRS stating that it has been rejected and why. This email will also give you instructions on how to remedy the problems so that you can refile your Form 2290.

Understanding and Filing Tax Form 2290: A Comprehensive Guide

Posted on November 1, 2023 by - 2290 filing

If you’re new to filing truck taxes or just looking to learn more about Tax Form 2290, you’ll find all the details you need here. This article will explain what this form is and how to complete it. We’ll also answer some of the most common questions about filing your IRS Tax Form 2290.

What is IRS Tax Form 2290?

IRS Tax Form 2290 is also known as the Heavy Highway Vehicle Use Tax (HVUT). This tax is levied on heavy vehicles of at least 55,000 lbs. that regularly drive on public highways. Any heavy vehicle that operates on public highways more than 5,000 miles per year or 7,500 miles per year for agricultural vehicles should file. Any individual or company with such a vehicle registered in their name must file HVUT Tax Form 2290. 

Understanding HVUT Tax Form 2290

You may wonder why heavy vehicles must pay additional taxes to use public highways when other drivers can simply pay the gas tax. Experts estimate that a fully loaded heavy truck can cause at least 5,000 times as much wear and tear to highway surfaces as the average passenger car. The Heavy Highway Use Tax Form 2290 ensures that heavy vehicle operators pay their fair share toward the repairs and maintenance needed on our highway system.

How to Complete 2290 Highway Use Tax Form

Filling out your 2290 Highway Use tax form can be confusing, but it doesn’t have to be. To file this tax, you’ll need information about your business, such as address and employer identification number (EIN). You’ll also need information about your vehicles, such as VINs and taxable weight. Start by filling out your company or personal details at the top of the form. 

Next, flip the page to the chart marked “Tax Computation.” On this page, you’ll determine the amount you owe based on the number of vehicles you operate in each weight category. At the bottom of this page, total the number of vehicles you’re filing for and the amount you owe. You’ll use this information shortly.

Next, complete both copies of Schedule 1: Schedule of Heavy Highway Vehicles. You’ll need to list the VIN for each vehicle along with its weight class. Again, total everything up at the bottom of each page. 

Once your Schedule 1s are complete, flip back to the first page of your 2290 IRS Tax Form and continue filling it out, starting with Part I: Line 1.

  1. Fill in the date as noted on the form, then follow that with the total from your Tax Computation page.
  2. Add in any additional tax from an increase in vehicle weight, and total those numbers.
  3. List any credits owed to you and attach documentation for them.
  4. Subtract credits from your total taxes, and you’ll have your balance due.

Next comes Part II. Here, you’ll declare any exempt vehicles, generally because they don’t do much highway driving. You’ll also list those vehicles you’ve sold throughout the year, noting the date and buyer. 

After this, it’s more identifying information. Designate any third party you want to be able to speak to the IRS on your behalf. Then, sign the form, date it, print your name, and include a contact number. Leave the last part blank unless you are a paid tax preparer.

Tips for Avoiding Common Errors on Federal Heavy Use Tax Form 2290

Several errors are fairly common when filling out your tax form. These include:

  • Employer identification number and business name do not match
  • Duplicate VINs 
  • Duplicate Form 2290 online filing
  • Banking details are entered incorrectly

Be careful when transcribing all numbers, especially VINs and banking details. It’s also good practice to double-check your entire form before submitting it to the IRS. 

FAQs on Federal Heavy Vehicle Use Tax Form 2290

What is the IRS Tax Form 2290?

IRS Tax Form 2290 is a federal form that must be filed by anyone with heavy highway vehicles weighing 55,000 lbs or more registered in their name. These vehicles are subject to the Heavy Vehicle Use Tax (HVUT) and require this form for reporting. 

How often do I need to file the HVUT Tax Form 2290?

HVUT Tax Form 2290 needs to be filed annually. Its tax year starts July 1 and ends June 30 of the following year. You may also need to file additional forms if you need to amend an error, change your address, or correct a VIN. 

What is the purpose of the heavy highway use Tax Form 2290?

Heavy highway use Tax Form 2290 is used to calculate and pay annual taxes due on heavy vehicles. These taxes are levied on heavy vehicles traveling 5,000 miles or more (7,500 for agricultural vehicles) during the tax period.

Where do I submit the 2290 highway use tax form?

The 2290 highway use tax form can be filed either by mail or electronically. If the tax due on the form is $500 or more, it must be filed electronically.

Can I get a proof of payment for the 2290 IRS tax form?

Once the 2290 IRS tax form is filed and the tax is paid, you’ll receive a stamped Schedule 1 from the IRS as proof of payment.

How do I calculate the tax amount for the 2290 road tax form?

The tax on the 2290 road tax form considers the taxable gross weight of the vehicle and how many months the vehicle was used on public highways during the reporting period.

Who should file federal Heavy Use Tax Form 2290?

Federal Heavy Use Tax Form 2290 should be filed by individuals or organizations with a registered heavy highway vehicle. This includes any vehicle that drives on highways and has a taxable gross weight of 55,000 lbs or more.

Can I claim any exemptions or credits on federal heavy vehicle use Tax Form 2290?

Yes, there are exemptions and credits that you can claim on the federal heavy vehicle use Tax Form 2290. Exemptions include vehicles used 5,000 miles or less (7,500 for agricultural vehicles) and vehicles used for charitable or governmental purposes, among others.

Conclusion

Filing IRS Form 2290 can be complex, but with the right online partner, the process is significantly easier. Partner with expresstrucktax.com to file quickly and receive your Schedule 1 in minutes. You’ll also enjoy access to features like our free VIN checker and VIN corrections and US-based customer service in case you run into any questions or need assistance with your form.

Comprehensive Guide to IFTA Mileage Calculators

Posted on October 15, 2023 by - IFTA calculator

To understand an IFTA mileage calculator, you must first know what the IFTA is. The International Fuel Tax Agreement (IFTA) is an arrangement between the US and Canada to simplify how commercial fleets report fuel use. Motor carriers that operate in multiple jurisdictions can use an IFTA mileage calculator to simplify tax reporting.

What Is an IFTA State Mileage Calculator?

An IFTA state mileage calculator is a tool that truck drivers and trucking companies use. It can calculate a truck’s miles driven in each state for International Fuel Tax Agreement (IFTA) reporting.

The calculator typically requires the following information:

  • Start and end points of each trip
  • Any fuel purchase records for the trip

You may also need to enter details such as the type of vehicle and date. The calculator will then use this information to calculate the mileage driven in each state. The resulting data is essential for IFTA compliance, as drivers must pay fuel taxes in the states and provinces where they operate.

How Does an IFTA Fuel Mileage Calculator Work?

An IFTA fuel mileage calculator is a tool that helps commercial truck drivers calculate the fuel mileage they drive in each state. It considers the miles driven and the fuel consumed in each state.

The calculator then uses this information to calculate the average fuel mileage for each state per quarter. This information is important for IFTA reporting, as it determines the amount of fuel tax owed to each state.

If a motor carrier owes more fuel tax than they have paid, they will need to pay the difference. If they have paid more fuel tax than they owe, they receive a refund.

How Do I Use an IFTA Mileage by State Calculator?

Here is an example of how to use an IFTA mileage by state calculator. For the purposes of this example, we’re using IFTA Free Calculator.

Let’s say you are a truck driver who drives from Los Angeles, CA, to Dallas, TX. You drive 1,500 miles along the way. You purchase 50 gallons of diesel in each state you drive through.

On the IFTA mileage by state calculator, you would enter the following information:

  • The starting zip code of your trip: Los Angeles, CA, 90012
  • The ending point of your trip: Dallas, TX, 75207

The calculator will then ask how many gallons of fuel you purchased in each state you passed through. Once you plug in your fuel purchases, it will calculate how much tax or credit is due in each state. Here are the results of our imaginary trip:

StateTaxable MilesTaxable GallonsTax-Paid GallonsNet Taxable GallonsTax or Credit Due
AZ39254504$1.04
CA2283250-18-$15.35
NM1652350-27-$5.67
TX658915041$8.20
TOTAL14432002000-$11.78

You can then use this data, compiled over a three-month period, to pay any taxes due to each state and claim any refunds owed to you.

How to Calculate IFTA Mileage

There are two options for calculating IFTA mileage. First, you could do this manually. You would need to track the miles you’ve driven in each state or province during the appropriate period. You would also need to calculate the fuel you’ve purchased in each state or province during the same period. You would then use this data to calculate how much fuel tax you should have paid to each jurisdiction and compare that to how much you actually paid.

Of course, there is a far easier way to manage this. An IFTA mileage calculator can do all the math for you. It will then tell you how much you owe to each jurisdiction, as well as how much credit you can claim. 

Use Bestpass to Reduce Fleet Costs

Fuel is a considerable expense for commercial fleets. IFTA taxes and tolls add to the costs. Fortunately, there is a simple way to reduce your spending without sacrificing efficiency. Toll management solutions from Bestpass can help you keep your costs under control and streamline your budget. Contact us today to learn more about how we can help.

How To Generate an IFTA Report With TruckLogics for the Third Quarter

Posted on October 11, 2023 by - IFTA

The IFTA deadline for the third quarter of 2023 is Tuesday, October 31st. 

Are you tired of having to manually do the calculations for IFTA? Look no further than TruckLogics and its IFTA-only option. Here you can generate IFTA reports by entering your data via manual upload, a TruckLogics Excel template, or through Motive ELD. TruckLogics will do the calculations for you and keep track of all of the IFTA tax rates so you don’t have to. 

Below you will find how to generate your report with TruckLogics in only a few simple steps!

Creating an IFTA Report using IFTA-Only

1. First, when using the TruckLogics IFTA-only option you will need to create an account. Select whether you are a Business Owner or a Service Provider and enter your business name, and contact information.

2. You will then select the plan you want. There are two options, the 

  1. “Generate IFTA Report Only” option and 
  2. The “A Complete Trucking Management” option. The latter option is a subscription-based service that will give you access to all of the features needed to manage your trucking business. 

For the purpose of this tutorial, we will choose the “Generate IFTA Report Only” Option. 

3. Enter your business information including your business name, business address, country, base jurisdiction, and your IFTA account number. Once you do this you will click “Let’s Go”.

4. Click “edit” on the IFTA settings. 

5. Here you can change the fuel usage and distance units from “Gallons” and “Miles” to “liters” and “kilometers” as well as your IFTA Signing Authority. 

6. Once you are finished click save. 

7. Next, you will click the “Manage Trucks” button under “Qualified Trucks for IFTA” to add any trucks you need to report IFTA for.

8. Here you can add trucks manually, import them from Motive, or ExpressTruckTax. 

For the purposes of this tutorial, we will select the “Add Truck Manually” option. 

9. When you select this option you will enter the truck’s Unit Number, Make, Model, Fuel Type, VIN, and Gross Vehicle Weight.

10. When you finish adding all of the trucks you are generating the report for, you will click on the “IFTA” tab.

11. Make sure the appropriate tax year is selected.

12. Choose “Start Return” under the appropriate quarter. 

13. Select which trucks you want to generate the report for or add new trucks.

14. Once the trucks you need to report IFTA for are selected click “Next”. 

15. You then will be asked how you want to import distance and fuel for this quarter. You can either select “Upload Data in Bulk” where you can use the TruckLogics IFTA Excel template to upload your data at once, “Quick Entry” where you will enter the distance and fuel data manually for each truck, or “Pull data from Motive” where you can import Distance and Fuel data from your connected Motive account. 

16. If you select “quick entry” select the QE button beside each truck and enter the data manually either by odometer or distance. 

17. Make sure all of the information is entered for each month including trip date, state, odometer start, odometer end, trip type, distance, nontaxable distance, toll miles (if applicable), and fuel purchased. Then you will click “Save”. 

18. Once the data for all trucks has been added click “Next”. 

19. Review the IFTA summary and click “Next”. 

20. You will now see the tax amount you owe. If you have any credits from previous IFTA filings enter them into the box labeled “Credit Amount”.

21. Then you will click “Next”. 

22. Review the information one last time and then click “Next” again.

23. The system will check your return and make sure all of the necessary data has been entered and nothing was left blank. If needed, add any of the missing data, and then click “Next”. 

24. Now it is time to pay the service fee. Click “Proceed to Pay”.

25. Enter your billing information and click “Confirm and Pay”.

26. Once you pay the service fee, you can download your IFTA Report by clicking “Download IFTA PDF”. Print it and file it with your base jurisdiction.

Create an IFTA Report from TruckLogics Account (for Preferred and Premium plans only)

1. From anywhere in your TruckLogics Account select the “IFTA” Tab.

2. From here you will follow steps 4 through 25 from the tutorial above to complete your IFTA report. The only difference is that you will also have the option to upload data from trip sheets and fuel expenses from your TruckLogics account for IFTA reporting. IFTA generation, in this case, is also included in the prices of the subscription instead of having to pay per report. 

State IFTA Reporting

Not all states allow you to paper file. Instead, they require you to file using their file system. For those states, TruckLogics provides an e-file worksheet to make entry into the state’s e-file system easier. This comes at no extra cost to you, however, it is your responsibility to know whether or not your state allows paper filing or only allows e-filing.

A worksheet does not constitute a valid refund request. Regardless, TruckLogics has the solution for all of your IFTA needs whether you use the IFTA-only option or report IFTA directly from your TruckLogics account. 

What are you waiting for, go to TruckLogics and start reporting IFTA today!