Monthly Archives: August 2014

Maybe you’ve filed on paper at your “local” IRS office. Maybe you’ve e-Filed with another provider. What are some ways ez2290.com can make a difference in filing your 2290 for this year?

It’s easy to file from anywhere
With ez2290.com, you don’t have to be physically present in any particular place. When you may have done paper filing in the past, you had to go to an IRS office, wait in line, and complete the process while there. Time is money, as they say, and that’s particularly true in trucking.

Instead of standing around an IRS office, you could be on the road making money! To help, you can file your 2290 online. As long as you can access our website, we can take care of the rest for you.

File for all of your trucks under one login
Whether you have one truck, two trucks, or hundreds of trucks, you can add all of the information under one login. That enables you to keep all of the info in one place, and makes filing for next year even easier. We can just carry your information over from the current year to the next year with a simple click of your mouse.

What about multiple EINs? We can handle those under one login as well. Add as many businesses as you need to, and keep each of the separate businesses trucks in the proper place in our system.

Access your 2290s at any time
Once you file your 2290 and get the acceptance back, we will email you a copy. You can also access it online under your login. That way, if you ever need to find it again, you don’t have to dig through all of the paper in your truck to pull it out. Just log on and pull it up.

As a truck owner, you are also a business owner. Federal law requires that you create an EIN for doing business as a truck owner. You’ll use the EIN when you file certain documents for government agencies, such as the tax form 2290 for heavy vehicle road use.

When you create your EIN, you will encounter a question asking what type of “legal structure” is requesting the EIN. Which one should you choose? While you may be a business or lawyer in your spare time when not driving your truck, chances are you may not be entirely familiar with the types of legal structures. Let’s cover the main ones briefly here. Of course, we aren’t business or tax lawyers either, so if you need help determining which is right for you, please find an attorney or tax professional to help you.

Sole Proprietor
Many owner/operators are sole proprietors. To be a sole proprietor, you do not have to do anything other than obtain your EIN. No paperwork, no legal fees to establish a legal entity, no stress over what type of business to be. So why wouldn’t everyone do it this way? Sole proprietors remain personally liable for lawsuits files against their businesses. That means if you have an accident with a motorist, and they sue your business, they are really suing you. You may have insurance against that, but the possibility remains. Also, sole proprietors pay taxes on the earnings from the business on their 1040, or personal tax form. You may find advantages in the other legal structures to minimize some of those taxes.

Limited Liability Company (LLC)
Another popular structure with owner/operators, the LLC creates a legal structure separate from the personal assets of the owner(s). LLCs also allow the debt from the business to be kept separate from personal obligations. While that reduces the amount of stress you may have from fear of lawsuits or bankruptcy in your business harming your personal situation, the taxation remains similar to a sole proprietorship for a single owner. You may hear the term “disregarded entity” in this context. That means that the IRS “disregards” the LLC as separate from the owner for tax purposes, so the profit or losses of the business are the same as those of the owner. In the case of partners forming an LLC together, the taxation will resemble that of a partnership (see below).

Partnership
A partnership can be similar to either of the first two options above. You can enter into a partnership where each partner acts as a sole proprietor, or you can construct the partnership as an LLC. Unless made under an LLC, a partnership does not provide relief from liability for lawsuits. The taxation of profits or losses goes on the 1040. Benefits of partnership include spreading some of the risk and combining the different skills of two or more owners to provide a better service or product to customers.

S Corporation
An S corporation has shareholders. Like an LLC, an S corporation is an independent legal structure separate from the shareholders to separate personal assets from business assets. Owners must still report their income from the S corporation on their individual taxes, but in this case that eliminates the need to report them at the corporate level, preventing double taxation. There are also certain requirements to qualify as an S corporation:

•  Be a domestic corporation.

•  Have only allowable shareholders.

•  Have no more than 100 shareholders.

•  Have only one class of stock.

•  Not be an ineligible corporation (i.e. certain financial institutions, insurance companies, and   domestic international sales corporations).

  Additionally, S corporations are more formal in that they must hold annual meetings and report minutes from those meetings.

C Corporation
A C corporation shares similarities with an S corporation, but has a few important differences. There is no limit to the number of shareholders. The corporation also pays tax on the corporate profits, while shareholders pay tax on dividends or capital appreciation, should they sell their stock at a profit. Shareholder also may not deduct a loss based on their ownership of stock in a corporation that posts a loss.

A Word About Business Names
As you complete the process to receive your EIN, and choose the type of business, you will also have the chance to choose a Doing Business As name, also referred to as a DBA name. While this name remains attached to the EIN, it is important to note that it is NOT the legal name of the entity. Should you create an EIN as a sole proprietor, your name is the legal name of the entity. If you go through an incorporation process, the name on your papers of incorporation is the legal entity name. Be sure to use the legal entity name when filing tax forms, such as the heavy vehicle highway use tax form 2290.

Bottom Line
Choosing a type of business and obtaining an EIN are important steps in the formation of your business. Be sure to choose the right type for your situation, and don’t hesitate to seek professional advice or assistance as needed.

You may know you have to pay it, but do you know what the heavy highway vehicle use tax, paid via IRS form 2290, is for? And what are the weight requirements before you need to file tax form 2290?

The heavy vehicle use tax, or HVUT, helps pay for highway maintenance by contributing to the Highway Trust Fund. The Highway Trust Fund, or HTF, reimburses states for maintenance projects that keep highways driveable. Because of the weight of large vehicles, they put more stress on the roadways. Thus the need to collect revenue in the form of the heavy vehicle road use tax that can be used to maintain the highways.

The IRS collects this revenue via form 2290. They require all filers with more than 25 trucks to file electronically. In addition, the IRS encourages all filers to file electronically.

Who pays the tax?
Any owner of a vehicle weighing more than 55,000 pounds must file form 2290 to pay the heavy vehicle road use tax. The tax amount varies from $100 to $550, based on the gross weight of the vehicle. Based on the regulations, you can determine the gross taxable weight of the vehicle by adding together:

• The actual unloaded weight of the vehicle fully equipped for service.

• The actual unloaded weight of any trailers or semitrailers fully equipped for service   customarily used in combination with the vehicle.

• The weight of the maximum load customarily carried on the vehicle and on any trailers or semitrailers customarily used in combination with the vehicle.

Once you know the weight, the calculation to determine your tax starts with $100 at 55,000 pounds. For each 1,000 additional pounds, add $22 of tax. The taxable weight caps at 75,000 pounds, meaning the most you’d pay in tax is $550.

If the weight of the vehicle you drive, or the load you pull, goes up during the year, you file an amended heavy vehicle highway use tax form 2290. There are also a few exemptions and exceptions to check before you file and pay the tax. The tax is due annually, payable in the first month after you use the vehicle on the highways. If you are not driving your truck during a particular year, you won’t owe the tax. That’s why they call it a heavy vehicle road use tax, after all.

Bottom Line
As everyone pays their tax, the funds accumulate in the Highway Tax Fund. The HTF disperses the funds to states, which use the funds to build and maintain roads. So when you pay your heavy vehicle road use tax, don’t forget that you are helping to pay for the roads you and your fellow drivers will be using.