The process of filing the international fuel tax agreement or IFTA tax report is not simple and can be very stressful. This process becomes even more difficult if some simple mistakes are made on a regular basis. These mistakes can cause some unwanted delays in filing your IFTA tax and if not corrected on time. These mistakes can be the reason for governmental audits.Read More
For most of the fleet operating companies, IFTA tax report filing is a huge administrative problem and they want it to be done with great accuracy and quickly. They spend a lot of time tracking the miles and fuel so as to avoid any type of unwanted audit in the end. Therefore, one needs to assemble a list of 9 most common IFTA reporting mistakes that need to be avoided very easily.
1. Tax return not filed
Filing your quarterly IFTA tax reports is mandatory. You must always submit your quarterly reports in a timely fashion. Some fleets only operate in a particular season. Suppose your fleet doesn’t work due to any reason in a particular quarter, you are still required to file your IFTA tax return.
Make it a compulsory habit to file your quarterly IFTA tax return no matter what. You can set up a reminder to your phone or choose any other way but you must not miss your IFTA tax return otherwise you are entitled to fines and you still have to file it. Therefore, why not file it on time for every quarter.
2. Inaccurate fuel calculations
It is very critical to record your fuel purchased and consumed very accurately. Sometimes, you are so busy with your fleet operations that you just want to use estimated values for your fuel calculations. But to get your tax credits, these fuel calculations need to be very accurate and also backed by the fuel receipts. Inaccuracy can lead to the financial audit.
I worked as a truck driver, carpenter’s assistant, doing whatever it took to keep bread on the table for the family.- Scott Glenn
3. Personal miles not recorded properly
Drivers need to record all the miles driven during each day but sometimes they avoid reporting their personal miles like trucks driven to get the fuel, food or the miles used to unload the goods. Your log book must have each and every mile starting right from the truck driving out of the base to deliver the goods and until it comes back to the base after delivering the goods. You have to mention each and every mile specifically in your ifta fuel tax rates reports otherwise there will be some discrepancy. And again, this results in the audit.
4. Late filing your IFTA report
IFTA reports need to be filed quarterly, therefore you have to be ready with all your numbers every quarter. Sometimes, you are so occupied with your other fleet related or business related issues that the deadline to file your IFTA reports is right on your face. It is very tedious to come up with all the fuel records and mileage calculations so fast.
This will be the cause of late filing of your IFTA reports. Late filing can generate a $50 fine or 10% of the tax whichever is higher. If you keep getting late with your IFTA tax report filing then you may have to face an audit. This means even more time is wasted for more paperwork.
5. GPS or odometer issues not reported
IFTA tax report solely based on accurately monitoring the fuel usage and miles. If your vehicle faced any GPS or odometer related issues during any trip, you must report it in your quarterly reports. Don’t forget it as it can impact your IFTA tax numbers.
6. MPG not calculated accurately
MPG or miles per gallon is very crucial for your IFTA tax calculations, it must be very accurate and transparent always. Most of the trucks have almost the same MPG for each quarter. It can slightly change due to some maintenance problems but all in all remains constant.
If your MPG has huge differences during a few quarters, then you must report the reasons for that otherwise you are inviting troubles like an audit for your company. Therefore, you should always double check before filing your IFTA reports that all the numbers are good to go.
Video Credit – Dan Klepper
7. Non compliant software usage
There are so many softwares in the market to offer you the desired IFTA solutions including the various GPSs. Each vendor claims that their software is IFTA compliant but actually is not the case. So it is very important on your behalf to double check the software compliance because if it is not IFTA compliant then you invite trouble and governmental audit is on your way. You cannot simply rely on the numbers provided by these non compliant softwares, therefore always use the correct software for your fleet operations.
8. Every single mile is not reported
Reporting each and every mile is very important for your accurate fuel tax reporting. You don’t want to leave any single mile unreported including the miles driven in the tail end of the reported quarter. You cannot report these miles in the following quarter therefore you must not miss on any of these miles.
A lot of time fleet companies believe they have enough time to file their IFTA tax report but by believing so they just avoid the IFTA calculations for a bit longer. IFTA calculations are difficult and time-consuming therefore you should not wait for the last moment to file your IFTA tax reports.