A business that operates heavy-duty vehicles must pay a heavy tax when it hits the road: the heavy-duty vehicle use tax (also called the federal "highway use" tax).
In the past, you could have spread out the tax bite over four annual installments. But a little-noticed piece of last year's tax law eliminated the installment method for paying highway use taxes. That change is effective for payments due after July 1.
Bottom line: You'll need to pay the full tax due by the Aug. 31 deadline.
The IRS just issued a "friendly reminder" to business owners that the installment method no longer is available. (IRS information release 2005-68)
The tax applies to trucks, tractors and buses with a gross weight of 55,000 pounds or more. So, the tax doesn't apply to vans and pickups. The tax is based on weight and normally ranges from $100 to $550 per vehicle.
In the past, taxpayers who filed Form 2290 on time could elect to pay the tax in four equal installments, due on the last day of August, December, March and June. Almost 150,000 taxpayers opted for the installment plan last year.
But for tax years beginning July 1, 2005, and ending June 30, 2006, you must pay the balance due in full by the return's due date. In most cases, that will be Aug. 31.
Tip: If you pay highway use taxes for 25 or more vehicles, you must file your Form 2290 electronically now.
Online resource: For more details, access the instructions to Form 2290 at www.irs.gov/instructions/i2290.
Like what you've read? ...Republish it and share great business tips!
Attention: Readers, Publishers, Editors, Bloggers, Media, Webmasters and more...
" This information is proudly provided by Business Management Daily.com: http://www.businessmanagementdaily.com/5587/pay-heavy-vehicle-tax-up-front-you-cant-spread-it-out "