How to report a 2290 Suspended vehicle?

How to report a 2290 Suspended vehicle? Are you operating a business using heavy vehicles like trucks, tractors? If so, then you need to file Form 2290 to the IRS. According to the IRS, the truckers are required to file 2290 returns for both taxable vehicles and suspended vehicles.

Doesn’t know about 2290 suspended vehicles? Don’t worry! We will let you know about reporting a suspended vehicle on 2290 Tax Form. Furthermore, we will provide you information about 2290 suspended vehicle. Moreover, with the help of the below information, you can determine vehicle categories easily.

How to report a 2290 Suspended vehicle

What is a 2290 Suspended vehicle?

When a heavy vehicle doesn’t cross the mileage limit of 5,000 in a tax period, the vehicle is exempted from paying Highway Tax. In such a case, the heavy vehicle belongs to the “suspension category”. Category W denotes suspended vehicles. However, the suspended vehicle must be registered by the IRS to use public highways. Hence, file Form 2290 for suspended vehicles and report the heavy vehicle under the suspension category. Besides, pay HVUT when the suspended vehicle falls under the taxable vehicle category. Furthermore, you need to file 2290 Tax Form by the end of the last month of change.

For example, Jack purchases a heavy vehicle weighing 55,000 pounds. He uses heavy vehicles only in a seasonal period. Hence, the vehicle has traveled only 3,000 miles in a tax period. Jack must file Form 2290 under the suspension category. Therefore, the heavy vehicle is a tax-exempted one.

How to determine your vehicle fall under the suspension category?

Following are the condition which determines you that the vehicle will fall under the suspended vehicle category:

  •       If your commercial vehicle travels less than 5,000 miles in a calendar year.
  •       When an agricultural vehicle uses public highways for less than 7,500 miles in a tax period.
  •       Suppose, if you operate a business using a blood collector vehicle on public roads.
  •       If you own a non-transportation semi-trailer to run business or trade.
  •       When you operate an off-highway vehicle for non-transportation functions.

Does a suspended vehicle require to pay HVUT?

No, suspended vehicles are not required to pay Heavy Vehicle Use tax. As mentioned earlier, there is no road tax incur on suspended vehicles. Moreover, suspended vehicles travel less than 5,000 miles in a tax year. Hence, they cause less damage to public roads when compared to taxable vehicles. However, the IRS imposes truck taxes when the suspended vehicle changes to a taxable vehicle and uses public roads for nearly 5,000 miles or more.

For instance, Jack has filed Form 2290 under the suspension category in October 2020. Suddenly, in March 2021 the weight of the vehicle carrying load has increased and has crossed 5,000 miles in 6 months. Then, Jack must report the sudden change in the vehicle weight and mileage limit by the end of April 2021.

How to File Form 2290 for a suspended vehicle?

According to IRS, the trucker must file Form 2290 whether the vehicle is taxable or tax-exempt. Furthermore, the filing requirements and process for a taxable vehicle and tax-exempt vehicle are the same. The major change is taxable vehicles must pay Highway Tax and tax-exempt vehicles are not required to pay highway maintenance tax. Gather the below information before you begin to file Form 2290 for suspended vehicles:

  •       General business information such as business name, address, and the type of the business individual.
  •       Employer identification of the individual whose business information is provided in the beginning.
  •       Gross weight of the vehicle. As you are filing 2290 returns under the suspension category, you need to mention the category of the vehicle.
  •       Vehicle Identification Number which used mostly to identify the vehicles when stolen or damaged.
  •       First Use Month of the vehicle which started using the public roads on a course of business or trade.

What are the basic requirements to sell a 2290 suspended vehicle?

When you’re planning to sell a 2290 suspended vehicle offer a statement that contains the following details:

  •       Details of the buyer. This includes the name of the buyer, address, and EIN.
  •       Information of the seller such as name, address, and EIN.
  •       Mention the date of the sale on the Form.
  •       VIN of the vehicle which you’re selling.
  •       Odometer reading at the beginning of the tax period.
  •       Odometer reading at the time of sale.

Ensure to provide a suspension statement to the buyer when you’re selling a suspended vehicle. Otherwise, the IRS imposes a penalty for failing to provide a suspension statement.

How to avoid 2290 penalties and unnecessary fines?

To avoid paying 2290 penalties and unnecessary fines you need to keep systematic records. Furthermore, the trucker responsible to maintain specific records about the vehicle’s usage and mileage details at the time of disposal. With the help of the mentioned information, the IRS conducts an audit to check the vehicle is tax-exempt or not. Moreover, by keeping a track of vehicle usage at the starting of the tax period the trucker can easily fill-out a suspension statement when selling a tax-exempt vehicle.

Hurry up! 2290 Tax Forms are due to the IRS for 202-21 on August 31st, 2021. Form 2290 Filing is the best IRS certified e-file provider. Our e-filing helps you to transmit tax returns over the internet hassle-freely.

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