If you’re a company driver thinking of going out on your own, then there is one aspect of the business you can’t afford to overlook—IFTA fuel taxes. That’s because US states and Canadian provinces depend on IFTA revenue to maintain their highway systems. For this reason, they’re especially vigilant about ensuring that self-employed drivers pay these fees fully and on time. Should you fail to do so, you’re likely to get a certified letter or even a knock on your front door from tax officials. When this happens, the results can include a costly audit, fines, and severe legal penalties.
IFTA can also influence all of your financial decisions for the year, including new equipment purchases or taking time off, whether for vacation or for a engine overhaul project. How? You have to take your finances into consideration before making such decisions, and this includes your taxes—both what has been paid and what will be owed. Careful planning is required to avoid harsh tax penalties if you haven’t paid everything you owe come IFTA reporting time.
How Often Should You Calculate Your IFTA?
Yes, a non-trucker asked me that question.
Four times a year should be enough. Figure it out and send it off and forget about it for another 3 months.
But the non-trucker was asking a smart question. What if you figured out your IFTA more often? Would it help you?
I have to admit, it might.
I know truckers who drive through the tip of West Virginia and get stuck paying the tax. I know some truckers that go out of their way NOT to drive through West Virginia just to avoid the filing. We’re already changing the way we drive because of the IFTA. Maybe using the IFTA information to figure out where to buy fuel will help reduce the taxes due. But more than that – knowing what we owe may help us know how much we need to put aside for the quarterly tax.
Now that we have a way to figure out the IFTA in seconds, we can know how much we’ll owe in just a few minutes with TruckingOffice’s IFTA calculator. I don’t know about you, but I just put money aside and hoped I had enough to pay the IFTA before I got TruckingOffice. But now that I have TruckingOffice to calculate my IFTA in seconds, it makes sense to use an IFTA report to be sure I have enough saved – but not too much.
Setting aside too much money for the IFTA is taking the funds out of your pocket and changing your personal plans.
- Vacation? Do I have enough cash?
- New truck? I don’t know if I can afford it.
- Another trailer? Are you kidding me?
Suppose that with every payment I get for a load, I already know how much I need to set aside – down to the penny. I can put it into a special account or debit card, and then when the IFTA rolls around, I’d have the cash safely stored away and ready to pay. I haven’t tied up my extra money. Instead of using a factoring service, I might be able to manage my expenses myself – and make more money in the process. I’d have the cash on hand for an unexpected repair instead of paying credit card fees. I can be saving for the downpayment on new equipment now, instead of waiting until the end of the quarter.
If the non-trucker hadn’t asked, I’d never have thought about this. I’m going to give it some more thought, but I’d like to know what you think. Is this a good idea? Is it overkill?
IFTA Fuel Tax Software Helps You Make a Profit and Gives Peace of Mind
You can have an accountant look over your profit and loss statements from the last year or two to help you figure out your financial standing, TruckingOffice has a specialized report that computes revenues per mile, expenses per mile and profit per mile. Trying to figure out how and why you’re making a profit – or what’s stopping you from doing that – is critical to your success as an owner-operator.
A good software program like TruckingOffice will be able to figure all that out for you from the same data that you enter at dispatch. You don’t need a specialized IFTA fuel tax software that only does one thing. You need a program that does it all. More than doing it all – it gives you the peace of mind knowing that you’ve paid the right amount of taxes and reduced the risk of being audited. You can relax because your invoices can get sent out before you leave the delivery dock, which will speed up the amount of time it will take you to get paid. You won’t have to guess when the last time you had an oil change done because it will be in the program with a reminder to pop up when it’s time to do it again. Think about all the stress you won’t have to deal with.
Doing the IFTA to save yourself stress?
It might just work.
What do you think?
We’re so sure you’ll love our IFTA fuel tax software that we’re offering a 30-day free trial. Take TruckingOffice for a spin, try out all its features, and decide for yourself if it’s the product for you. If it is, then one low monthly fee is all you need to enjoy its many powerful features over the long haul. Start your complimentary test drive today.