What You Should Know About IFTA Quarterly Tax Return
Any person who holds a license under the International Fuel Tax Agreement is supposed to declare an IFTA Quarterly Tax Return. In order to remain in operation and on the right side of the law, truckers must comply with a variety of rules and regulations concerning the roads usage. For example, if your vehicle exceeds a gross weight of 55,000 pounds or more, you will have to submit an HVUT Tax Filing.
IFTA is a joint arrangement among 48 states in the U.S. and 10 provinces in Canada. It requires cross border carriers to register and submit taxes on fuel consumed by their vehicles throughout states using a single fuel tax licence. IFTA has defined coherence and productivity in the collection of fuel taxes between states parties.
Besides the advantages of IFTA to trucking companies, the treaty also provides that states are fully paid for using heavy commercial vehicles on their highways. Taxes are collected yearly and are used for the upkeep and maintenance of these highways. It is estimated that IFTA saves trucking companies millions of dollars annually in operating costs.
Trucking companies and drivers should collaborate with each other to correctly monitor the amount of fuel used in various states. As a trucker, you should also play your part in monitoring the odometer readings carefully when crossing borders. To avoid unnecessary errors, you should use fleet management software to electronically record the accurate mileage in each state.
When calculating your IFTA Quarterly Tax Return, you should know the following: How many miles you've traveled in each state (This is where HVUT Tax Filing comes in if your truck exceeds a gross weight of 55,000 pounds). • How many gallons you have purchased in each state. • Total fuel mileage for the whole quarter. • Maximum gallons burned at every state. • Your tax owed to each jurisdiction. • The cumulative sum of money you owe on your IFTA return.
Filing quarterly IFTA taxes can be a daunting task despite the existence of methods which help enhance reporting. However, following the right procedures will keep you on the good side of the federal trucking laws and regulations.
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