The International Fuel Tax Agreement- IFTA is an agreement that is said to simplify filing the reporting of fuel use by trucks that process in more than one state or province. So, while the reporting is essential and provides you with benefits, the operation of gathering information manually for IFTA documentation can be quite a headache to endure.Read More
Shifting through a hand-written traveling logs to manually document everything tends to consume your time. However, this can also result in inaccuracies in terms of reporting. In addition to this calculating the mileage driven in each state along with the costs involved requires a lot of paperwork. While necessary, many people tend to feel nervous through this process and have other business-related responsibilities that can be finished on the top of filling out of such reports.
To increase effectively and do away with time-taking, consuming and manual processes, many businesses are now turning to GPS tracking IFTA software to automate tax reporting.
What is IFTA?
For every trucking or carrier business, it is essential to file the taxes on the given time. In case the tax return is precise or up to the mark, you may be liable for several tax penalties. There are many IFTA fuel tax software available around you these days. The International Fuel Tax Agreement helps you to maintain every detail related to fuel tax permits for all eligible vehicles and allows them to travel in jurisdictions easily. The IFTA only expects you to file the return in case you do not have a dutiable fuel during the span.
Somehow, the fastest method to calculate the fuel tax is IFTA itself. It also assists businesses in saving a lot of their time as well as money. The IFTA also creates technological integration and efficiency in the fuel tax calculator and related payments.
Which are IFTA Prerequisites?
You will find lots of – fuel tax reporting-related should know about when submitting your IFTA yields. First of all, industrial vehicles are required to record the mileage driven, fuel purchased, and tax paid in each nation their vehicles traveled for a specified quarter. Bear in mind, you will also have to list the mileage driven together with fuel bought in each jurisdiction, not only the combined total amounts.
This however means that if a motorist buys the fuel for their truck in 1 jurisdiction, he’s required to report that the mileage of the truck that he drives in that specific jurisdiction together with the others the automobile passed through. This report permits the base-jurisdictions to accumulate the precise quantity of tax based on mileage traveled.
There is a quarterly filing required even if you have not traveled for the quarter. However, the important dates of filing the same are:
January-March April 30
April-June July 31
July-September Oct. 31
October-December Jan. 31
How Can You Register Vehicles For IFTA?
In Order to have a qualified vehicle for IFTA registration, you have to follow these simple steps:
- Here, you need to have established or let’s say licensed business in the state from which your fleet operates.
- You must accumulate mileage records in the states you travel through.
- Try to maintain the fleet records in process in the respective states.
- Operations must be held at least once in other IFTA Jurisdictions.
To enroll in a new automobile, you may also get into the local DMV of your region. As soon as you’re finished with enrollment, you have to make an IFTA account, your provider will be issued concerning IFTA permit and IFTA stickers to put on the door.
Common IFTA Reporting Mistakes
Well, submitting your fuel tax reports may be a little complicated task to go for, but in actual it does not have to be. So, if you want to help your fleet in preparing for the next quarterly report, here are few mistakes that you must avoid.
Estimating Fuel Calculations: This might be a little tempting when it comes to estimating the consumption of fuel in the past 3 months, especially when the IFTA due dates are just around the corner. This mistake can be surprisingly costly if not taken care of.
So, to eliminate the guesswork out of the reporting, you should consider using an highway use tax calculator to effectively record the miles your fleet traveled. The right software will automatically record the engine data and other information like maintenance, invoicing, mileage, tracking the driving, and much more.
Video Credit: Lissa Smith
Not Recording Personal Miles: Always keep in mind that documenting your mileage on your IFTA account is essential. This also comprises the mileage employed for a few personal errands. While reporting of IFTA- Accuracy is the secret, and IFTA never distinguishes between the a variety of route kinds, as for them a mile is a mile and it’s supposed to be recorded. On the other hand, another portion of the narrative is that only be prepared to submit an IFTA account on your heavy vehicles which didn’t travel any miles throughout the quarter. In the event your truck has been empty for a specific quarter, then you still need to submit a return of ZERO MILES.
Odometer or GPS Issues: Recall your IFTA reporting must remain accurate. This also suggests that if there’s a problem in the component of your car or truck and is affecting the mileage throughout the coverage period, it takes to be flagged if you document the exact same.
If your truck encounters any issue like odometer or GPS associated problems, or another problem which may affect your mileage. All you have to account for this from your IFTA tax report. A busted estimate or maybe worn tires may influence your odometer reading which could lead to erroneous mileage reading. This is to be certain your mileage is properly reported, attempt to take into account an IFTA alternative that automatically optimizes your motor related data to correctly assess the mileage.
Filing Late: Here, one of the biggest mistakes is not filing the report on time. If you are filing your IFTA report late it can lead to a fine of around $50 or even 10% of the total highway tax.
How Fleet Software Automates IFTA Reports?
The Fleet software is a safe and secure platform that allows you to save your business-related information. This provides you with access to the records only in the official or master device you want to operate in. The solution also helps you to track everything in terms of dispatch history. This provides you with detailed information about the order related details such as status, dispatch, shipment, and delivery along with the driver’s information. The advanced tracking software can also maintain the accounts and calculate the salary of each employee in the company. The fleet software lets you edit and delete the data easily. Here, you can also release the payments in advance to the driver or any other staff for a specific reason.
What Is IFTA Audits and IFTA Penalties?
Every member jurisdiction registered under IFTA is required to audit 3% of the licensed base yearly. This is to verify compliance and make sure that the correct amount of tax is paid. However, the prospect of an IFTA audit can be quite daunting for some, but they serve an important purpose. Also, if you have a good track record, the audit somehow becomes more of a process to validate the records. If your information is valid and complete, be it manual records, or the GPS data the process of audit tends to go much smoother.
However, talking about penalties- if you fail to comply or are not able to file the same on the time. Every IFTA jurisdiction has its own specific rules, but many of them tend to follow a framework. For instance, in both California and NY, you will be charged with a fine $50 or with a penalty of 10% penalty if you fail to file your return. However, you will file after the due date, or fail to be the amount due.
If you tend to travel to an IFTA jurisdiction without a permit, you may be able to assess a penalty, fine, or even suspension depending on the jurisdiction’s law. However, California, you could be charged by $100 to $500 of fine.