You know that they say: New Year, New Truck! And if they don’t say it, they should start.
What could be better than kicking off the New Year with a shiny new ride! And with all of the end of year sales, I’m sure there are plenty of Truckers out there writing a list to Santa right now, asking for a beastly new 18 wheeler. (Boy, would that be difficult for Santa to get down the chimney and cram into your stocking! But hey, who are we to doubt Christmas Magic!)
Even without the help of Santa and his reindeer, it seems that plenty ExpressTruckTax users are already upgrading their rides! With 2015 on the horizon, our Support Heroes are getting lots of questions about transferring a Schedule 1 from a previously filed truck to a new one. They’re also getting questions about transitioning to a new business, new business name, or a different EIN, but with the same truck.
And then there’s always those who sell or lose their trucks, and decide to exit the transportation biz altogether. If you’re leaving the business mid-tax year, can you get part of your hard-earned HVUT money back?
We have a guide to help you with all of these scenarios! Whether you’re doing the trade-in shuffle or changing your business name or EIN, here’s how to get your Form 2290 sorted AND get some of your money back, too!
“Transferring” a Vehicle (AKA: Credit Vehicles)
- If you purchased a new truck mid-tax year, and your previous truck was sold, stolen, or destroyed, then you can get a new stamped Schedule 1 without paying extra tax. Many refer to this as “transferring,” but that’s not exactly how it works with the IRS.
- Here’s why it’s not really a transfer per se. A Schedule 1 cannot be transferred from one vehicle to the next. However, you can effectively file your HVUT and get a new stamped Schedule 1, without paying any extra tax.
- And how, might you ask? You need to E-file a Form 2290 for the new vehicle and add a credit vehicle to that same return with the information of the previous vehicle. By adding a credit vehicle, you’ll receive a prorated tax credit for the remaining months of the tax year through July 1st.
- When E-filing a 2290 with a Credit Vehicle, the IRS will prorate the credit for the old vehicle based on the first used month of the new vehicle. The first used month is the month in which you purchased the new vehicle.
- To save the most money, do the transfer at the end of the month. The IRS prorates the tax on a monthly basis, not daily. This means that If you buy the new vehicle at the beginning of the month, even on the very first day, the IRS will still apply tax for the entire month for the previous vehicle, as well as the new one.
- The new Form 2290 must be filed by the last day of the month following the month in which the “transfer” occurred. This means that if you switch vehicles today, November 18th, 2014, the new 2290 would need to be filed by December 31st, 2014.
- However, this transfer process (E-filing a 2290 with a credit vehicle) will only work if the business name and EIN remain the same. If they’re different, see the instructions below.
*Head over to Part 2 of this blog to see step-by-step instructions on E-filing your 2290 with a credit vehicle!*
Change of Business Name and/or EIN
- If your truck remains the same, but your business name changes, you must file a new 2290 and get a new stamped Schedule 1 with the correct business name.
- Even if your business name only changes slightly, you must still file a new 2290. Typically, this occurs when a business becomes an LLC or corporation for example, in which case you must update your Name Control so that it matches your EIN in the IRS database, and then E-file a new Form 2290.
- Be sure to update your vehicle’s title to match as the DMV will not consider your Schedule 1 valid if it doesn’t match your title exactly.
- If only your EIN changes, you must also file another Form 2290 to receive an updated Schedule 1.
- In all of these instances, you can still get some of the tax money that you already paid back. After E-filing the 2290, file a Form 8849 under the previous business name/EIN to receive a prorated refund of the HVUT.
Sold, Lost, or Destroyed Vehicle- without a Replacement
- If your vehicle was sold, stolen, or destroyed during the current tax year, and you aren’t replacing it with a new vehicle, you must E-file Form 8849 to receive a prorated refund of the HVUT paid.
- While E-filing Form 8849 will only take 5 minutes with us, it will take the IRS 4-6 weeks to process the request and mail you a check for the refund.
- Check out my previous blog for a step-by-step guide on E-filing Form 8849!
I know this is a lot to take in, so I made a nifty little infographic for you to see what you need to file at-a-glance–because I love you guys!
Still confused? That’s what the Support Heroes are for! Their digits are 704.234.6005. Call them and speak to an E-filing expert in our hometown of Rock Hill, SC. Plus they can assist you in English, Spanish, or Russian! If you need 24/7 assistance, just shoot them an email at support@expresstrucktax.com.