How Taxes Can Impact Your Fleet

Who’s excited? Today on the Fleetio Blog, we are talking about everyone’s favorite subject, taxes. You might be inclined to skip over this one, but here’s why you should care. Just like preventative maintenance and other responsible fleet management practices, you may not be generating income, but you can surely save your company a great deal of money (and headaches) by considering the following tips.

Business vs. Personal Mileage

If you haven’t already, it is important that you establish a clear policy about what denotes personal and business mileage at your company. Fuel is one of your largest regular expenses, and even if you are great at reducing these costs, much of it can fly out the window if you let employees rack up undocumented personal miles. Even if your company views a take-home vehicle as a perk, the driver should still understand that personal miles are taxable income and should be accounted for.

To make it a regular habit, I would suggest setting a weekly or monthly reminder for your drivers to update their mileage and send them to an easily accessible fleet management system, shared document or spreadsheet. If this is done too infrequently, a lot of guesswork could be involved in the numbers.

Vehicle Depreciation

Of the low-hanging fruit that will save you on taxes, recognizing depreciation among your assets is pretty effortless deduction. Typical depreciation 20% of the value each year, essentially putting the “usable life” (as far as the government is concerned) on a 5 year cycle. If you are leasing vehicles, however, the owner gets to count this depreciation while you can only factor in the lease amount as an expense for the company.  

It might be a close call, but those leased vehicles may not be saving you in the long run. Either way, it’s worth considering tax implications in the annual operational cost.

Alternative Fuel Tax Credit

You have undoubtedly considered an alternative fuel option or two as a proactive fleet manager. Tax season is an annual reminder that you could be getting rewarded for switching to something besides gasoline or diesel. Check out what you could have deducted in 2013 and do a little research what credits (state and federal) are available and see if this is the year to make a change.

If you happen to be alternatively fueling any of your vehicles or equipment with your own facilities (either with a station or canister refiller), then you could receive a $0.50 per gallon credit. Qualifying methods include CNG as well as propane autogas in reusable canisters that powers equipment such as forklifts and airport tugs. Check out the Fuel Excise Tax Return if you apply.

Over the Road Requirements

If you are an over the road or trucking company, then you have more tax considerations to be mindful of. The Heavy Highway Vehicle Use Tax is a per-vehicle annual assessment based weight. The filing period, unlike your regular taxes, falls in August and represents the previous 12 months. Your only way to avoid this one is to keep a fleet vehicle under 5,000 miles (7,500 for agricultural vehicles) annually, in which case you still have to file but do not owe anything. You can find the IRS form here.


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