New Law Changes Highway Use Tax Rules: Installment Payment Option EliminatedWritten by Richard A. Chapo
The IRS is reminding truckers and other owners of heavy highway vehicles that installment option for paying federal highway use tax will no longer be available. This change was included in American Jobs Creation Act of 2004 and applies to filers of Form 2290, Heavy Highway Vehicle Use Tax Return.Beginning with Form 2290 for tax year that begins on July 1, 2005 and ends on June 30, 2006, balance due shown on form must be paid in full by due date of return. In most cases, deadline for filing 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 pay tax in four equal installments. Ordinarily, these installment payments were due on last day of August, December, March and June. About 148,000 taxpayers chose this option last year in 2004. In general, 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 below 55,000-pound threshold.
| | IRS Certifies 2006 Toyota Hybrid for Clean Fuel DeductionWritten by Richard A. Chapo
The Internal Revenue Service has certified 2006 Toyota Highlander Hybrid as being eligible for 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, 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 for 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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