Submitting your IFTA fuel tax reports can be a lengthy, tedious process. With all the time you pour into tracking your mileage and fuel records, you want to make sure you complete these reports correctly (and avoid the dreaded audit).
Check out the nine most common mistakes when it comes to IFTA reporting so your organization can avoid making them.
Filing Your IFTA Report Late or Not at All
You’re busy. And the IFTA deadline always seems to sneak up on you. It’s tough to dig up months of fuels records and calculate mileage.
But, you’ve got to send in your IFTA report on time. Submitting your IFTA report late or forgetting to submit it all together will 1) lead to a fine of $50 or 10 percent of the net tax liability, whichever is greater and 2) potentially result in an audit, meaning more paperwork, scrutiny and expenses.
Estimating Fuel Calculations
It’s tempting to save time by estimating your fleet’s average miles per gallon and miles traveled at the end of an IFTA quarter, but it’s crucial to record these numbers accurately.
In order to receive refunds or tax credits, you are required to record fuel receipt information including gallons purchased. Also, if fuel calculations seem incorrect, your fleet could be audited.
Not Documenting Odometer or GPS Issues
Your IFTA mileage is expected to be accurate. If any of your vehicles have odometer or GPS issues during the reporting period, do not forget to note it since it could affect your reported numbers.
Not Logging Personal or Unloading Miles
All miles traveled need to be reported. Although it may seem irrelevant to report miles your drivers take during a trip to unload or for personal errands like getting food, these still need to be specified. It raises a red flag when there is a gap between mileage in driver trip logs from one day to the next.
Suspect Miles per Gallon
Accuracy and transparency are key. Reported average miles per gallon are expected to fall between 5 to 10 MPG for trucks and remain relatively the same each reporting period.
If your metrics are outside this range or vary drastically from one quarter to the next, be sure to give an explanation as to why. Otherwise, it may look suspicious and result in an audit.
Before submitting your report, check your numbers to make sure there are no data entry errors or inaccurate trip records.
Waiting Until the Last Minute
Procrastination is tough to combat. It’s tempting to put off IFTA reporting tasks. However, given the amount of preparation IFTA requires, procrastination increases your risk for error. As time consuming as it may be, allot more than enough time for your organization to complete IFTA reports.
Not Filing a Return
Always, always, always submit a quarterly IFTA report. If you have an IFTA license, you must submit a report every quarter, no matter what. Even if your fleet does not operate during a quarter, like with seasonal work, a report is still required from your fleet.
Mark your calendars, set an alarm or do whatever you need to do in order to always send your report on time. Otherwise, you will have to pay a $50 fine or 10 percent of the net tax liability.
Using Non-compliant Software
Be cautious—some software solutions, including GPS, claim to be IFTA-compliant when that’s simply not the case. If you’re using a software, double check that it uses approved calculation methods. Otherwise, reliance on it to track and report your metrics could set you up for trouble.
Not Recording Every Mile
No mile gets left behind. Remember that every mile traveled in a quarter must be included in your IFTA reports. This includes the distances traveled at the tail end of the quarter. Waiting to report these miles in the following reporting quarter is not allowed.
Keep these mistakes in mind as you approach the end of another IFTA reporting quarter!
Be sure to check out how our Fuel Summary by Location Reports can streamline the IFTA reporting process for you.