Truckers: Highway Use Tax Return Is Due August 31
The IRS is reminding truckers and other owners of heavy highway vehicles that, in most cases, their next federal highway use tax return is due on August 31, 2018.
The deadline generally applies to IRS Form 2290 and the accompanying tax payment for the tax year that begins on July 1, 2018, and ends on June 30, 2019. Returns must be filed and tax payments made by August 31 for vehicles used on the road during July. For vehicles first used after July, the deadline is the last day of the month following the month of first use.
The IRS is encouraging taxpayers to file (and pay any tax due) electronically. If your business has 25 or more vehicles, you must e-file, rather than file Form 2290 on paper.
The highway use tax generally applies to large trucks, truck tractors and buses with a taxable gross weight of 55,000 pounds or more. Ordinarily, vans, pick-ups and panel trucks aren’t taxable because they fall below the 55,000-pound threshold.
The tax of up to $550 per vehicle is based on weight. Keep in mind that a variety of special rules apply to some vehicles, such as those with minimal road use.
When Does an Employee Qualify as Exempt From Withholding?
When helping staff members fill out W-4 forms, they may ask if they can be exempt from federal withholding. Here are some points to keep in mind:
- Did the employee have a tax liability in the previous year? If he or she received a refund of all federal income tax paid (or had a right to a refund), the employee had no liability and can claim to be exempt.
- Does the employee expect to have a tax liability this year or expect to qualify for a refund of all federal income tax paid? To make this determination, the W-4 worksheet asks:
- Can the employee be claimed on someone else’s income tax return this year (such as a parent)?
- What level of income does the employee expect this year?
- In addition to earned income, does the employee expect to receive more than $250 in unearned income (such as interest or dividends) this year?
Note: An “exempt” W-4 is only valid for one year. If your payroll includes employees who claim to be exempt, require them to see you every January to fill out new W-4s to reflect changes in their situations.
Current Procedures: Years ago, employers were required to send copies of questionable W-4s to the IRS for evaluation. However, this requirement was dropped years ago. The IRS may still determine that an employee is under-withholding based on information reported on W-2s. If your employee is found to have a serious under-withholding problem, your payroll department may be contacted and instructed to withhold at a more appropriate rate. (IR 2005-45)
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