New Law Changes Highway Use Tax Rules: Installment Payment Option Eliminated

Written by Richard A. Chapo

The IRS is reminding truckers and other owners of heavy highway vehicles thatrepparttar installment option for payingrepparttar 148234 federal highway use tax will no longer be available. This change was included inrepparttar 148235 American Jobs Creation Act of 2004 and applies to filers of Form 2290, Heavy Highway Vehicle Use Tax Return.

Beginning withrepparttar 148236 Form 2290 forrepparttar 148237 tax year that begins on July 1, 2005 and ends on June 30, 2006,repparttar 148238 balance due shown onrepparttar 148239 form must be paid in full byrepparttar 148240 due date ofrepparttar 148241 return. In most cases,repparttar 148242 deadline for filingrepparttar 148243 return and paying any tax due is August 31, 2005. Payment can be made by check, money order or electronically through electric payment (EFTPS).

In previous years, taxpayers who timely filed Form 2290 could choose to payrepparttar 148244 tax in four equal installments. Ordinarily, these installment payments were due onrepparttar 148245 last day of August, December, March and June. About 148,000 taxpayers chose this option last year in 2004.

In general,repparttar 148246 highway use tax applies to trucks, truck tractors and buses with a gross taxable weight of 55,000 pounds or more. Ordinarily, vans, pick-ups and panel trucks are not taxable because they fall belowrepparttar 148247 55,000-pound threshold.

IRS Certifies 2006 Toyota Hybrid for Clean Fuel Deduction

Written by Richard A. Chapo

The Internal Revenue Service has certifiedrepparttar 2006 Toyota Highlander Hybrid as being eligible forrepparttar 148233 clean-burning fuel deduction. This certification means that taxpayers who purchase one of these hybrid vehicles new during calendar year 2005 may claim a tax deduction of up to $2000 on Form 1040.

Under Working Families Relief Act of 2004, which was signed into law in October of 2004,repparttar 148234 clean-burning fuel deduction is limited to up to $2,000 for certified vehicles first put into service in 2005 and $500 for vehicles placed in service in 2006. No deduction will be allowed after 2006.

Federal Law allows individuals to claim a deduction forrepparttar 148235 incremental cost of buying a motor vehicle that is propelled by a clean-burning fuel. By combining an electric motor with a gasoline-powered engine, these hybrid vehicles obtain greater fuel efficiency and produce fewer emissions than similar vehicles powered solely by conventional gasoline-powered engines.

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