If you're someone who possesses a vehicle that drives for a low mileage, then you will be able to easily avoid paying the Heavy Vehicle Use Tax (HVUT) that is assessed on the tax form 2290. But what if a situation arises where the vehicle exceeds the mileage allotted, what do you do? In this article, we will provide you a thorough guide on how to proceed with the incident.

How to Know the Exemption Attained is a Low Mileage for The Form 2290

Infrastructure Revenue Service authorizes a relief from Heavy Vehicle Use Tax to vehicles that drive less than 5,000 miles during a specified tax period (the mileage is 7,500 for vehicles involved in agriculture). Form 2290 makes it possible to determine the taxable amount of these vehicles under the tax law as to how many of them are set aside otherwise known as ‘suspended’.

If Your Vehicle Goes Over The Mileage Limit

You would be triggered the necessary taxation if you cross the mileage limit, here's what you could do to ensure that you remain compliant:

• Always Make Sure To Keep A Log For The Mileage It is important to have a working system in place where mileage can be tracked effortlessly. The extent to which you track the mileage will ultimately determine whether you surpass the 5,000 or 7,500 mile point.
• Have Time Tracked For When The Maximum Mileage Would Be Surpassed When filing your taxes and calculating your prorated HVUT liability, you should have a set date in mind when the vehicle would potentially exceed its maximum allotted miles.
• File a Revised Form 2290 In the instance that your vehicle exceeds the mileage limit, you will be required to file a revised Form 2290 in order to change the status of your vehicle.

Submitting a Revised Form 2290

In order to submit a revised Form 2290, keep in mind the following steps:

Collect the Information Required

The following information will be necessary:

• VIN (Vehicle Identification Number)
• Gross vehicle weight subject to income tax
• The day the mileage limit of your vehicle was met

State the Details of the Amendment

In case your vehicle does end up meeting the mileage limit, your Form 2290 should indicate that this is a revision on account of the vehicle exceeding the mileage limit. Further, enter the relevant date in the correct form section.

Work Out the Tax Payable Ratio

The payback tax amount will depend on the month in which your vehicle inched above the set threshold. You can figure out your amount owing by utilizing IRS’s tax table.

File the Form and Make Payment

If you fail to file your amended submission or make the required HVUT payments on time, you may have to incur penalties and interests. So don’t delay.

Avoiding Penalties and Interest

Moreover, penalties, as well as interest, can apply to a client who doesn't act quickly once their vehicle’s mileage exceeds the limit. To avoid such situations, such taxpayers should do the following:

• Apportion regularly without Missing Mileage: Incorporate GPS as well as mileage logging applications and you will never be in for a shocking surprise.
• Rules That Should Be Followed When Filing: Submit a revised copy of Form 2290 on the first occasion when you can reasonably ascertain that your vehicle has surpassed the stipulated limit.
• Records: Retain comprehensive tax balance sheet records and mileage patterns including every filing done for a period of at least three years.

Special Considerations for Agricultural Vehicles

For those working in the agriculture industry, the acceptable vehicle mileage limits go up to 7,500 miles. Ensure that you are on top of this difference and whether an amended return is required, ensure all the steps are followed.

Although going over the set limit for a vehicle with low mileage usage from your Form 2290 can be scary, it doesn’t have to be. However, you can avoid this complication by acting quickly at the time of need and filing an amended Form 2290 and most importantly staying on top of the organization. It’s worth remembering that all the compliance does not only help avoid auditor fines or penalties but also enables proper business operations.

Note: For more information, visit IRS website