working with IFTA

It's always better to hang on to my money!! I never looked at it as a windfall, just as prepaying a big portion of my plates. When I go back out I would do the same thing, it was my own little way of putting money aside, kinda like a when a carrier deducts $35/week for plates. The money I would make in interest from a savings account is basically nothing.

 

There is no trick to get IFTA to work in your favor. This is bad advice and I'm not sure that you understand how IFTA works. There is only one way to calculate IFTA and you didn't address it in this post, but there is no reason to do what you suggest. If you want to buy fuel at the lowest cost it's Pump Price - Tax charged at the pump = Fuel Price That's it. After that calculation you can compare fuel costs. IFTA tax owed is 100% unaffected by where you buy your fuel.

 

Be careful. Many drivers don't understand IFTA. There are not multiple strategies. IFTA is only calculated one way and there's only one way to determine the cost of the fuel. Many people will tell you about buying a little fuel in each state or something like that. If you want to buy the lowest cost fuel you don't want to do something like that. Anyone who says something like that probably doesn't understand IFTA or basic accounting or both.

RedForeman got it right. vangtransport might not have it right. I can't say for sure since he only mentioned his objective when buying fuel was to pay the highest fuel tax at the pump. But if your objective when buying fuel is to get the lowest fuel cost then the tax at the pump doesn't matter.

To compare fuel cost it's Pump Price - Tax charged at the pump = Fuel Cost
After that calculation you can compare Fuel Cost at different places.

 

He gets it Ed. He just prefers the forced discipline of depositing money where he can't get at it to spend it. What I'm reading is, he applies the accrued credit to IRP when it comes due.

The only drawback is if your state ever decides for some reason that you owe them something (anything. sales taxes, whatever they can dream up), they've already got your money and you have no leverage with a protest. They will take your credit and apply it to whatever they think you owe, still bill you in full for IRP, and now it's on you to come up with all of it while your protest swims upstream to a hopeful resolution on their timeline, for a hopeful credit back some time in the future.

At least if you kept that in a hands-off savings account, handing over money to the state remains totally in your control. At least you'd retain control to withhold payment on the protested thing until it got resolved, and just pay your IRP in full in the mean time.

 

You can absolutely get IFTA to work in your favor if what you are trying to accomplish is avoiding a $700 bill at the end of the quarter. The OP didn't come on here and ask how to make sure he gets the cheapest fuel possible. So at the end of a quarter when you are writing a $700 dollar check and I'm seeing a refund, yet we still paid the same pre-tax price tell me how I don't get it. I didn't state pay the highest price possible, I said get fuel in the highest taxed state. So if he/she was going into AZ from CA and the pre-taxed price was the same, why would he fill in AZ, it would make no sense.

 

hey who did your ifta return??

any credits you have coming can be applied to a state where you owe money, the ifta return is totaled at the end and filed with your state, you simply add up the positives and subtract the negatives and pay the amount left, the home state sends the money to whoever owes it. for example if it showed you owed calif 700, had a credit(negative ) 100 dollars in Washington state, owed Oregon nothing, and had a cedit of 100 in Nevada you would only owe 500 in ifta tax.

I think someone is doing a goofed up ifta return for you.

that's the whole purpose of ifta is to ile one return, unlike the old days when you filed with each state and had fuel stickers for each state.

 

This is what he/she was asking ED!! Optimizing IFTA, anther words getting it to work for you rather than against you. If all things are equal pre-taxed, then always fill in the higher state and you will never have to pay, you will always get a credit. No it's not free money, as I stated to Redforeman, I looked at it as a savings account without interest.