How to Avoid Form 2290 Penalties?

There are several instances when the IRS will impose a penalty for filing your form 2290 late. Some of them include:

  • Check bounce or digital payment fail to get processed
  • Filing form 2290 after the due date
  • Heavy Vehicle Use Tax (HVUT) tax amount is incorrect

However, you can easily avoid the 2290 form late filing fees by following the below steps.

1. File on Time

Ensure you file your form 2290 before the due date to avoid late filing penalties. For example, if you’ve purchased a new vehicle, then your due date to pay the HVUT tax will be the last day of the month following the first used month.

For example, if you purchased your vehicle and drove it home on April 1, 2021, you must file form 2290 by May 31, 2021.

However, filing 2290 forms for other vehicles should be done between July 1 to June 30 of the next year.

2. Avoid Making Any Filing Errors

Oftentimes, the IRS rejects form 2290 because of filing errors, leading to delay in form processing. So make sure you review all the details before submitting them.

Some common reasons for IRS form 2290 rejection include:

  • Use of a new Employer Identification Number (EIN) before it gets updated in the IRS database
  • Filing your form 2290 more than once for the same vehicle for the same tax year
  • Entering incorrect bank details
  • Entering the wrong Vehicle Identification Number (VIN) number
  • Missing signature
  • Entering wrong payment dates

3. Always Opt for e-Filing Over Paper-filing

Unlike paper filing, e-filing your 2290 form ensures quick delivery of your Form 2290 Schedule 1 as soon as the IRS accepts your HVUT return. This allows you to instantly know if your form is rejected by the IRS to make corrections and re-submit it again without any delays.

With e-filing, you can easily file your form 2290 online compared to paper-filing, which involves reading through and understanding tax lingos.

4. Pre-file Your Form 2290

When you pre-file your form 2290, you get plenty of time to make corrections, double-check details, and clarify doubts if your form gets rejected or you get stuck somewhere while filing your form 2290. This way, you can rest assured that you won’t incur any late filing charges.

You can also pre-file your form 2290 before the peak filing starts to avoid the rush hour. For example, if you are filing your form 2290 for the year 2021-2022, you can pre-file between May 1st, 2021, and June 30th, 2021.

5. Apply for EIN Months Ahead of the Due Date

You must have an EIN to file your 2290 tax returns. If you don’t have an EIN, you can either apply it online, via fax or by mail. However, make sure you do it months ahead as it could take up to 4 to 5 weeks to receive your EIN.

Once you receive your EIN, it’s recommended to wait another 2 weeks for your new EIN to get updated in the IRS database. If you file immediately after receiving your new EIN, your form could get rejected because of an EIN mismatch, in which case you will have to wait another 2 weeks before you could file again.

6. Use Digital Payment Modes

It’s best to opt for digital payment modes as you could be penalized for late payments if your check or money order does not reach the IRS before the due date. In addition, check or money order payments could also be confusing and lead to penalties if you do not follow the right procedure.

The three ways of digital payment modes are:

  1. Electronic Funds Withdrawal (EFW)
  2. Electronic Federal Tax Payment System (EFTPS)
  3. Credit/Debit card

7. While Drafting the Check, Use the Correct Address

If you’re drafting a check to pay your HVUT tax, ensure that you cross verify every detail, including the right mailing address of the IRS. You must also send the check/money order through the U.S. Postal Service as private delivery services cannot deliver it to the IRS P.O. box address.

Mail to the following address:

Internal Revenue Service

P.O. Box 932500

Louisville, KY 40293-2500

8. Get Customer Support if You are Stuck

When selecting your form 2290 service provider, make sure that you choose one that offers 24/7 customer support. Having a customer support representative will make e-filing your form 2290 a lot easier as you will have someone assisting you every step of the way.

9. If You Can’t File, Have Someone File It for You

You can assign a third-party designee to help you file your form 2290. A third-party designee could be a tax professional or any authorized person that you designate to speak on your behalf to the IRS regarding your HVUT tax return.

Some service providers also offer file by phone service to file your form 2290 and pay your HVUT tax return.

Filing your HVUT tax return is a crucial aspect of being a trucker. But we often forget to pay our taxes or wait till the last minute, which could lead to penalties. The tax filing season is fast approaching, so make sure you avoid the above-mentioned mistakes and file on time.

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