Which taxes and fuels do I need to report quarterly for IFTA

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If you own a trucking company in America you will be paying plenty of taxes. Some of the taxes are based on the fuel your drivers use during interstate travel. States are entitled to tax trucks that travel on their highways and byways. 

According to Simplex Group, The International Fuel Tax Agreement is an arrangement between the U.S. and Canada. It simplifies tax payment and distribution in the trucking industry. Before the IFTA was created, truck drivers were required to register vehicles and pay fuel taxes in each state. The IFTA enables truckers to register and pay fuel taxes in one state. The trucking company pays its taxes to a local office. The IFTA office then distributes the tax money to the various states. You must report all fuel purchases made by your drivers during the course of business to the IFTA. 

 

How often do I have to pay IFTA taxes?

IFTA taxes are due to your local office on a quarterly basis. You have 30 days after the end of a quarter to pay your taxes. For example, the first quarter is January to March, so your taxes would be due by the end of April.

If you fail to pay your IFTA taxes on time, you will be fined by the IRS. You could be charged 10% of your tax bill. If you fail to pay your taxes altogether, your license could be revoked.

 

What documentation is required?

Fuel taxes must be documented and stored in an electronic file. You will require an itemized account of all the fuel you have purchased in each of the lower 48 states. 

It is recommended to save all of your fuel receipts. You will be expected to itemize them based on date, gallons purchased, tax rates, and vehicle registration number. Fortunately, there are electronic filing systems that can itemize your receipts for you. 

It is required to record the number of miles traveled in each state. You must also record the total number of miles traveled during each individual trip, and the total amount of miles traveled in each state for each quarter. Be sure to always record the date and time you were traveling.

 

How do I know the amount of money I will pay in taxes?

In order to determine what you owe in taxes, you must know the tax rate in each state you travel through. The IFTA provides a quarterly publication detailing the latest tax rates from various jurisdictions around the country. Almost every mile you drive in the USA will be taxable. There are very few states with tax-exempt highways. 

It is necessary to make all of your tax payments on time and in the correct amount. It is best to hire a trained accounting company specializing in truck taxes to handle your returns.

When your taxes are paid, you will be able to breathe easily. You can concentrate on getting cargo from place to place, hiring drivers, and maintaining your vehicles.