Did you know the U.S. tax code is nearly 4 million words? That’s a lot of technical jargon, right? We understand you don’t have enough time while you spend life in transit. You might be an expert in your field but you may end up making the silliest of mistakes when filing your taxes.
Filing your Form 2290 and paying your HVUT tax can be quite a feat in itself. Despite online filing making things smoother and easier compared to standing in a queue outside the IRS office, there are still a few things you must keep in mind. Here is a list of common HVUT tax return filing mistakes to avoid.
1. Tax Calculation Errors
This is especially difficult for those of you who struggle with math. Tax calculations can be a pain and drive you nuts at times. One small miscalculation can lead to your 2290 form being rejected.
The best way to overcome this is to use the 2290 tax calculator tool which allows you to calculate your tax for you in seconds. All you need to do is to enter your vehicle’s gross weight and First Use Month to know the tax amount you owe. It really helps you avoid unnecessary miscalculations when filing Form 2290.
2. Incorrect Vehicle Identification Number
Vehicle Identification Number (VIN) should be declared when filing your 2290 forms. However, many tax filers are prone to misquote their VIN as it is in a complex 17 character format.
Incorrect VIN submission is one of the most common reasons for form 2290 rejection. But, we got you covered. With eForm2290.com, you can update your incorrectly submitted VIN
information by filing a form 2290 Amendment for free.
3. Employee Identification Number Error
Another common mistake you can make when filing your 2290 tax return is entering the wrong Employee Identification Number (EIN). If your business name and EIN don’t match with that in the IRS records, your form 2290 can be rejected.
You will receive a notification regarding the same on your registered email ID or phone number. Once you receive this message, you can immediately re-submit your rejected filing easily over eForm2290.com. Just ensure that you verify your details with the IRS by calling their help desk.
4. False Filing
Be aware of how many miles your truck has covered within the tax period on public highways. If your truck has traveled less than 5,000 miles in a tax year, you must file your vehicle as suspended. When you reach or exceed the 5,000 miles limit, you must file your HVUT tax returns.
Also, make sure to select the current year when you e-file Form 2290. If you enter the previous year, you will end up paying tax for the previous year twice. Not just that, you will also have to pay tax for the current year. So don’t lose out on bucks.
[Read: 2290 Suspended Vehicle Filing]
5. Duplicate Filing
It’s unfortunate but it can happen. If you file a 2290 form for your vehicle twice in the same year, your 2290 Form can be rejected. Always ensure that you file your form once to avoid such mishaps. Double-checking your work can save you major headaches and frustrations down the road.
6. Missing the Due Date
When you file your 2290 Tax Form, you are filing based on the IRS fiscal tax year. Some may believe that the HVUT tax is due when your vehicle's registration is due. But the due date to file your form 2290 and pay your HVUT tax is by August 31st of every year.
If your vehicle’s First used month is after August 31st, then you must file form 2290 30 days from the date of First use. Filing your form 2290 after the deadline ahd many consequences. The penalty for filing late is 4.5% of the total tax that is due.
Additionally, if the HVUT payment is late, you will have a penalty of 0.5% of the total tax due. Before you file, it’s important to keep these dates in mind so you don’t miss them and end up having to pay more than you need to.
7. Misspelling Numbers
Be extra careful when filing your HVUT tax. Misspelled numbers or incorrect numbers can lead to form rejection. If you are e-filing your Form 2290 and making the payment online, be sure to enter the right bank account number.
When you select the Electronic Funds Withdrawal (EFW) option as an IRS tax payment option(1), enter the right bank account number. Incorrect bank account numbers will lead to declined payment. So be extra cautious as there is no way to verify your bank account number with the IRS.
8. Don’t Stick to the Standard Deductions
The IRS has different standard deductions and tax rates depending on your filing status. The different types of filing status are: single, married filing jointly, married filing separately, qualifying widow(er), or head of household.
Rather than going with the standard deduction, know which bracket you fall under. Calculate your tax returns using the online highway use tax calculator and know your tax rate.
10. Gross Weight Gone Faulty
Know your vehicle gross weight before you proceed to e-file your Form 2290. New to the industry and unsure of your truck’s gross weight? Calculate your truck’s taxable gross weight by adding the below:
- The actual unloaded weight of the vehicle fully equipped for service
- The actual unloaded weight of any trailers or semi trailers fully equipped for service customarily used in combination with the vehicle, and
- The weight of the maximum load customarily carried on the vehicle and on any trailers or semi trailers customarily used in combination with the vehicle
- Actual unloaded weight of a vehicle is the empty weight of the vehicle
11. Tax Suspended and Logging Vehicle Confusion
This section is very common to trip up first-time users. What exactly does suspended and logging mean? Your vehicle is tax suspended when it has traveled less than 5,000 miles in a year and it is now qualified for tax exemption.
This was mentioned during the false filing section earlier. A vehicle being tax suspended is most common among agricultural vehicles as agricultural vehicles are eligible to file form 2290 if it crosses 7,500 miles or more.
Logging vehicles are exclusively used for the transportation of lumber and other forestry goods to and from a forest site. Logging vehicles are taxed at a lower rate as opposed to other heavy vehicles, so it helps to know if your vehicle falls in the logging vehicle category.
12. Applied for New EIN?
If you’ve applied for a new EIN stay put for two weeks. It usually takes around two weeks for your new EIN to be updated in the IRS system. So even if you submit your 2290 Tax Form 2 weeks ahead, the IRS may reject your form because your new EIN isn’t updated on their database.
It is also important to note that your social security number cannot be used in place of your EIN. The 2290 Tax Form will be rejected if your social security number is used. If you’ve applied for a new EIN, wait patiently until it comes and then you proceed to file your 2290 return.
13. Misfiguring Tax Credits or Deductions
Tax credits and deductions can be overwhelming, don’t you agree? Sometimes, even though credit and deduction might look credible, you might’ve already claimed it. Or maybe you’re unable to make a claim due to various reasons.
14. Electronic Federal Tax Payment System (EFTPS)
There are three different ways to pay your HVUT tax. The Electronic Federal Tax Payment System is just one of those ways. But, you can only pay using this method if you have an account with them as they do not accept debit or credit payments.
If you plan to pay with debit or credit, make sure you do not select EFTPS. If you would like to pay with EFTPS, then make sure you enroll 5-7 days prior to filing. Other ways you can pay is by credit card or debit card which can be done over the phone, online, or using a laptop that has an internet connection.
15. First-Used Month Mismatch
If your vehicle has a taxable gross weight of 55,000 pounds or more and exceeds the mileage limit of 5,000 mile (7,500 for agricultural vehicles), you need to file IRS Form 2290 and pay the HVUT tax a month after it’s 'First Used Month'.
For example: John uses a taxable vehicle on a public highway by driving it home from the dealership on September 1, 2020 after purchasing it. John’s ‘First Used Month’ will be September, 2020 and he must file Form 2290 by October 31, 2020 for the period beginning September 1, 2020 through June 30, 2021.
16. Missing Signature
This might seem like a small error, but it is one that results in the rejection of your Form 2290. IF you are filing your form manually, your signature needs to be added on the first page in part II and on the last page of the form. If you do not sign your form, it could get rejected during its processing.
17. Not Keeping Up On Tax Changes
Remember how the tax code is nearly 4 million words? That makes it pretty complicated and can be difficult to know every little thing. Moreover, the congress updates the tax code little by little every year. This means you have to keep up with the latest tax news to stay compliant.
So before filing, you will need to check if anything has changed for the 2290 Tax Form. These changes can include different deductions or credits that are now available. You also don’t want to claim a tax benefit that is no longer available.
As you may be able to see, there are many ways you can make errors. Maybe you have made some of these above-mentioned errors; and maybe this will keep you from making future errors. If there are any takeaways, it’s to be prepared before filing and to double-, maybe even triple-check your form before submission.
We hope this exhaustive list will act as a checklist for you when you e-file Form 2290. Nevertheless, despite being extra cautious, if your form gets rejected by the IRS, worry not. You can retransmit your rejected Form 2290 for free and get your Form 2290 Schedule 1 within minutes by filing with eForm2290.com.