5 Common IFTA Mistakes: Accepted Vs. Audit
As you already know, or should know anyway, the 2nd quarter IFTA filing season is officially underway. If you haven’t already filed your return, now is the time to do so, and ExpressIFTA is here to make sure you don’t make any silly mistakes that could end up costing you more of your time and hard-earned money this tax season.
Below are some of the most common mistakes when filing an IFTA return, so be sure to avoid them so you don’t get slapped with an audit from your base jurisdiction!
Common Mistakes
Not Filing a Return if You Didn’t Operate-This may be one of the most common mistakes made and it also has the potential to be one of the biggest problems. Although many truckers are under the impression that if their truck hasn’t been operating they don’t need to file a quarterly IFTA return, that isn’t always the case. According to IFTA rules and regulations, all IFTA license holders with a valid license are required to file a return before the deadline, even if no miles were traveled during the period. If this is the case, you can simply file a zero return and no tax will be owed.
Not Keeping Fuel Receipts– Although keeping receipts is not the most convenient practice in the world, it is required that you keep IFTA returns, trip reports, and any other supporting documentation for the amount of time required by your base jurisdiction. If you don’t have a good method for keeping your receipts then give TruckLogics a try. With the TruckLogics app, you can actually take pictures of your fuel receipts and then upload them directly into your account for safekeeping.
Thinking Your IFTA Account Has Closed– If you do not renew your IFTA license at the end of the year, that doesn’t necessarily mean that your account will be closed automatically. While in some places this is the case, the process to close your account varies from state to state. Some states revoke and close the account at renewal time or once you fail to file, while others allow the account to remain open and each quarter that is late is subject to late filing penalties and interest for any tax due. We’ve actually seen customers in the past that have been required to file over 4 years of outstanding returns all because they didn’t close their account. Don’t let that be you!
Filing for Previously Unreported Mileage– Well quite frankly, if you have unreported mileage to file, just be happy that you aren’t already being audited. All mileage traveled during the quarter must be filed for: no exceptions. Even if it’s just the last few trips of the quarter and you think it won’t make a difference, trust us, you’ll want to be sure that mileage was all recorded properly in the unfortunate event of an audit.
Filing Late– This is probably the most common issue with IFTA returns. If you don’t file your IFTA return by the end of the quarter’s deadline, you can subject yourself to late fees and/or interest on the tax liability. A late-filed reports are subject to a late penalty of $50 or 10% of the net tax liability, whichever is greater. If the net tax liability is zero, then the late penalty will be $50. Interest is also compounded on all taxes owed after the due date at a rate of .4167% per month late until the amount due is paid.
All returns postmarked not later than midnight for the due date will be considered on time. If the last day of the month falls on a Saturday, Sunday, or legal holiday, filing on the first following business day will be considered timely. The deadline to file this year is Friday July 31.
After reading this, you can clearly see just how much of a hassle a small mistake can be on your IFTA return. But luckily we just told you everything not to do, so you shouldn’t have any problems!
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