Form 2290 Filing Tips Every CDL Student Should Know Before Hitting the Road
If you are a CDL student aspiring to start a career in trucking, life on the road entails more than merely turning wheels and accumulating miles. One of the most crucial tax forms for you will be IRS Form 2290 – the Heavy Highway Vehicle Use Tax Return.
It is vital that this form is filed properly, as compliance and absolution of penalties is contingent on it. Every CDL student must know these crucial filing tips before hitting the road.
What Is Form 2290 and Why Does It Matter?
Form 2290 is a tax document with the primary purpose of reporting and paying the Heavy Vehicle Use Tax (HVUT) for a vehicle’s use that’s equal to or greater than 55,000 pounds. It applies to commercially operated vehicles on public highways.
Suffice to say, it becomes applicable for all owner-operators, fleet operators, and anyone registering a heavy commercial vehicle in the United states.
Not filing Form 2290 on time, or at all, can lead to incurring fines and interest on top of the defaulted taxes, making it a legal stressful and troublesome scenario needing far too much effort to escape in order to register with the DMV.
Be Aware of When to File Form 2290
Keep in mind that the tax year for the Form 2290 runs from July 1 to June 30. The deadline for filing is August 31 if your truck is operational in July. If your truck is utilized later in the year, the IRS expects that you will file it no later than the last day of the month succeeding the month in which you started using the vehicle.
Example: If your driving starts in October, your Form 2290 will be due on November 30.
Know Who is Responsible for Filing
Even as a fresh CDL holder, if you are purchasing or leasing your own rig, you will probably need to file Form 2290 as an owner operator. If you are driving an owned truck from a company, your employer will file it for you, but it’s good to know, especially if you are contemplating on going independent.
Obtain Your EIN Before Filing the Form
You must have an Employer Identification Number (EIN) to file the Form 2290, so an SSN is out of the question. If you don’t have one yet, you can apply for an EIN at the IRS site, but be aware that they take up to two weeks after approval to show up in the IRS system for e-file purposes.
Pro Tip: Getting your EIN at the right time will help you when filing since it’s needed to be ready beforehand.
Have Knowledge On Your Vehicle’s Taxable Gross Weight
The amount paid in tax is directly related to the trucks containing the trailer and the load, also known as the gross taxable weight. Ensure to keep track of the quantities required that would fall between the range of 55,000 to over 75,000 pounds.
Use this information to determine how much tax you owe using the IRS 2290 tax table.
Utilize E-Filing Providers Recognized By The IRS
Vehicles numbering 25 or more have to be filled and done electronically. However, in the case of only having one vehicle, e-filing is quicker, safer, and more convenient. It is easier to find services that grant you instant Schedule 1 copies which are essential for registering the vehicle.
A smooth process will be ensured if an IRS recognized e-file provider is sought for.
Remember to Note Your Schedule 1
Having your Form 2290 accepted means the IRS will now issue you a watermarked Schedule 1. This indicates payment has been made. This document is crucial—you’ll need it to:
- Register your vehicle with the DMV
- Renew your license plates
- Demonstrate compliance with tax law during audits
Tip: It is advised to store a digital version in the cloud, as well as a printed copy somewhere in the truck.
Be Aware of Vehicles marks 'Suspended'
If you anticipate driving your vehicle to be less than 5,000 miles (7,500 miles for agricultural vehicles) a year during the tax period, the vehicle qualifies as suspended and hence you don’t owe tax. However, you are still required to file Form 2290 and mark the vehicle as suspended.
In the event you surpass the mileage limit, you’ll need to retroactively amend your filings and pay the owed tax.
And Credits And Refunds Should Not Fall By The Wayside
Should you choose to sell off, destroy, or in some cases lose a vehicle, or it it was eligible for suspension but do not exceed the set mileage limit you may qualify for a refund or tax credit. Claiming these requires using form 8849.
Maintain all receipt copies and any related documentation which to some will be considered unnecessary, but will justify your claims.
Maintain Detailed Records To Protect Yourself in Audits
The IRS suggests that you hold on to your Form 2290 and Schedule 1 for no less than three years. If you’re a student now, developing recordkeeping discipline early will pay dividends throughout your trucking career.
Begin the Tax Preparedness for Your Trucking Career in the Right Way
Becoming a CDL driver is a big step – alongside it comes the responsibility of filing your Form 2290. Whether it is buying your first truck or leasing one, understanding the intricacies surrounding the filing date will allow you to stay compliant and avoid penalties.
