Running a trucking business is no easy feat. Maintaining compliance with ever-changing tax laws is a must. Every trucker is required to know IFTA, IRP, and Form 2290. These compliance obligations assist in the administration of fuel tax reporting, the registration of vehicles, and the taxation of heavy vehicles. In order to help truckers avoid penalties and ensure smooth operations, we will explain each component of this compliance trio.

IFTA: Fuel Tax Simplified

Through the International Fuel Tax Agreement (IFTA), truckers can conveniently report and remit fuel taxes over several states or Canadian provinces with one license. Instead of filing fuel tax reports in every jurisdiction separately, IFTA consolidates the burden into quarterly filings. This guarantees that all states receive their appropriate share of fuel tax based on miles driven. In order to prevent late fees, audits, and suspension of licenses, truckers must stay abreast of IFTA requirements.

What is IRP? Its Importance

The International Registration Plan (IRP) is an agreement between the United States and Canada that allows Canadian and U.S. truckers to register their trucks for travel over multiple jurisdictions. Truckers no longer have to register separately in each state; now, carriers pay a single fee depending percent to the amount they drive within that area. An accurate recording keeps all IRP records up-to-date, which makes life easier for interstate carriers.

Truckers are careful about renewals and record keeping, as both are necessary for IRP compliance.

Form 2290: Filing Heavy Vehicle Use Tax Requirements

Form IRS 2290 is utilized for reporting and paying Heavy Vehicle Use Tax (HVUT) for vehicles from 55,000 pounds and above. All filers need to pay the Heavy use Vehicle Tax by August 31 for most of the filers and this tax needs to be paid for vehicle registration purposes. If someone does not file the form 2290 on time, the IRS can impose penalties and there will be delays at the DMV.

Many truck drivers decide to e-file form 2290 as it enables them to process their stamped schedule 1 quicker.

As Easy As It Gets, Maintaining Compliance

Every IFTA, IRP, and Form 2290 have set prerequisites, but they can all be managed within a single system or checklist. If you happen to own a trucking business, an adequate software system, or a tax service provider can do the job for you. Safe compliance with deadlines is possible with proper planning. Set reminders on your calendar, and hold all records relating to miles driven, fuel bought, and even filing done online which is far more convenient when it comes to staying on top of deadlines.

Note: For more information, visit IRS website