Hi! I am attempting to do the IRS taxes for my boyfriends first year as a self employed flatbed owner operator. He drives throughout the US.

So I want to be sure I'm doing this right. Here are the forms I'm filling out:

Schedule C, 1040
Self Employed Form SE
Form 4562, Depreciation and Amortization (of his tractor/trailer)
Form 8829, Business Use of Home

I have already been doing his quarterly IFTA taxes which I found out can be deducted as expenses on the 1040, as well as his NY, NM, OR, and KY highway use taxes (also deductible as expenses). We are doing business out of FL.

So the form that has me perplexed is the is the 2290, Heavy Highway Vehicle Use Tax. I read through the tax section here and some truckers are mentioning this form. Does he need to file this form? The reason I ask is because it says that in order to be required to pay this tax the vehicle must have a taxable gross weight of more than 55,000 lbs. unloaded. His tractor and trailer weighs about 34,000 lbs. unloaded. So it seems that he is exempt?

..also are there any other forms or taxes I should know about?

Thanks!

He is licensed for 80,000 therefore subject to the heavy use tax.

so there's the catch. Thanks.

I'm kind of astounded at how high the IFTA taxes are. I can't wait to see how high the 2290 is.

I guess it works out when it can be written off as an expense on the income tax.

Unless I'm mistaken, the Highway Use Tax is $550.00 per year.

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I'm a man..........And I can change..........If I have to..........I guess.

You are correct. However, if not timely filed, there is going to be penalties and interest.

Great, not too bad.

The IFTA taxes, however, are about $4,000.00 per year (at least for us) but I recently heard there is a trick for getting them down to a few hundred dollars per year by buying fuel only in certain states. Any one know about this trick?

Oh, just to warn any one who doesn't know...there is a minimum income tax in many states that is now being enforced if you are a corporation. That means NJ can tax/bill you $300 (the minimum tax for doing business in their state) for doing just ONE drop off or pick up in NJ in one year! They can back tax you for as long as you have been meeting the minimum requirement. Many states can and are now enforcing similar laws. This can add up to huge tax costs, possibly crippling if many states suddenly catch you from your IFTA records and send you a tax bill.

So we are about to change his corporation to an LLC or sole proprietorship because they are exempt from this tax as they are not business entities subject to this tax. (I don't think S Corporation is exempt from these taxes but I'm looking into it because we would prefer to keep it an S Corporation).

IFTA tax is basically the fuel tax you pay # the pump, unless you are buying all your fuel in low tax states and running most miles in high tax states, you should really not owe very much tax at the end of the quarter. I buy most of my fuel in neighboring states with higher tax rates and usually get about a
$25 refund every year.

Hmmmmm. I followed the instructions on the worksheet. Did I do something wrong? The part that throws me off is column J (Total) because it says both DUE/CREDIT in the same column. How are you supposed to know if it is a refund or what you owe?

Here's an example:

In one quarter; he drove CA 1,070 miles.
Taxable gallons: 143
Surcharge rate: .3670
Tax DUE/CREDIT :$52.48
Total DUE/CREDIT: $52.48

so what the heck does DUE/CREDIT mean? how do you know if you owe a tax or if you are due a tax? I assumed it meant TAX DUE.

When I added together all of the states he drove in...not pretty.

Thanks for your help BTW, I may have this all wrong. Tax lady on the phone was about as helpful as a brick.

If he bought 143 gallons of fuel in Ca. he would owe nothing nor have a refund. If he bought 243 gallons he would have a credit of $36.70, if he bought 71.5 gallons he would owe $26.24. You then figure it this way for every state he ran in.

The first step in buying fuel is to determine the base price. This is arrived at by subtracting the state fuel tax from the pump price. If state A has a pump price of $3.43/gallon and a tax of $.34 your base price is $3.09. If state B has a pump price of $3.38 and a tax of $.25 your base price is $3.13. By paying $.05 more at the pump you are getting $.09 in IFTA credit making your "more expensive " fuel $.04 a gallon cheaper. Some quarters it may be more beneficial to buy higher priced fuel and owe little or even have a refund from IFTA, other times to buy cheaper fuel and owe IFTA a higher amount. As long as you are basing your purchase decisions on base price you are doing all you can.

I don't understand how your IFTA bill could be $4,000.00. Re-check your figures. Mine runs under $600.00/year.

I would be willing to look at it for you to see where you made a mistake.

Problem is I rarely go to Florida.

As Native Dancer stated, IFTA is not hard.

Just write down the gallons bought by state.
Write down miles by state.
Avg mpg is then used for the calculation for states.
Less tax paid. Difference owed or credited.

If you could scan it and email to me, I am home for a couple more days working on the annoying income tax returns I have to do this time of year.