fuel tax refund ?

Discussion in 'Business Operations' started by The Don'z, Mar 21, 2013.

  1. The Don'z

    The Don'z LawnSite Member
    Messages: 114

    Does anyone know if there is a tax law about getting "road use tax" back for fuel used in lawn equipment? would it be like farm equipment?
  2. Kelly's Landscaping

    Kelly's Landscaping LawnSite Platinum Member
    Messages: 4,725

    Anything used off road for business can get the federal highway tax back. It's like 18.4 cents a gallon for gas and like 24. something cents per gallon for diesel. We typically get back around $500 a year but its very time consuming to do those calculations. We have 250 or so fuel receipts each year the diesel is all truck so can't be counted. Then we have the gas which will always be missing receipts and some are unreadable so you have your master credit card report. You need to compare the 2 see whats missing what the prices were around that date and guesstimate the gallons that missing receipt would work out to. Then when all those numbers are there you can add all the gallons up and then figure what % went to off road for us its 95% of gas. We only have a single gas truck left in the fleet and it just does our running around stuff like P.O. box or buying some parts. But in years gone by that % was much lower like in the 70% range.
  3. ncknaklawns

    ncknaklawns LawnSite Senior Member
    from NY
    Messages: 379

    Form 4136- Fuel Credit from previous year used with Form 1040
    Keep track of Gallons used throughout the season.
  4. mkarps

    mkarps LawnSite Member
    Messages: 57

    So correct me if I'm wrong, but just thinking about this. I've deducted all the fuel as an expense. So buy filling this out and getting back the off road use part really I am just creating more income then to tax....Seems like a lot of extra work for nothing.
  5. Kelly's Landscaping

    Kelly's Landscaping LawnSite Platinum Member
    Messages: 4,725

    That is an interesting way of looking at it. But if you make the call not to because your raise you income and pay income tax on it, then do you make the same call about extra work and taking more jobs on. After all your then need to pay income tax on them as well.

    Income tax is not the same for everyone and the better you plan your deductions you could make several hundred thousand a year an have 0 liability. Regardless this is your money if you don't want it back then by all means skip the reports and filling out the form.
  6. zturncutter

    zturncutter LawnSite Bronze Member
    Messages: 1,308

    This is what I use - http://www.wexinc.com/about-us

    When filling a truck we slide the card, punch in the pin and the odometer reading. When filling a piece of off road equipment we punch in the pin and 1000, you could use any number to signify off road fuel. At the end of the month the statement shows the purchases and the off road fuel is easy to calculate, takes no time at all. Been using this method for years and I love getting some tax money back. :cool2:
  7. McFarland_Lawn_Care

    McFarland_Lawn_Care LawnSite Bronze Member
    Messages: 1,445

    We do something similar to ZTURNCUTTER. Have separate cards on the same Fuel account for equipment. Then when we get the fuel bill it itemizes out so much on equipment fuel cards and so much for truck fuels. Very simple and easy to track.

  8. mkarps

    mkarps LawnSite Member
    Messages: 57

    I am not telling anyone what to do I have just been struggling to figure out if this really even has benefits.

    When I take on a job I create extra income I wouldn't have had otherwise, which I then pay tax on.

    However with this credit, I take away an expense of fuel from my business and then just create it as income. So in the end...isn't it really the same thing as just expensing it out in the first place?
  9. zturncutter

    zturncutter LawnSite Bronze Member
    Messages: 1,308

    It would depend on your business structure, however unless your income, social and medicare rate is 100% you get to keep the balance after taxes.
  10. britsteroni

    britsteroni LawnSite Senior Member
    Messages: 334

    zturncutter is correct. Unless your tax bracket is 100% (which obviously is impossible), you are getting real money in your pocket. As others have mentioned, come up with a basic documentation system that you can give to your accountant at year end.

    The easist way to keep track in my mind is to pay for equipment fuel with a different CC than used for truck fuel. Then just keep your monthly stmts and you're done!

    Another simple method is to keep a log book in each work truck. Each time you fill up the equipment, write down the gallons purchased. End of year, add up the totals. This way you don't even need to keep two separate credit cards. Just fill up the equipment first, write down your gallons purchased, then proceed to fill up the truck.

    Try to maintain all your record keeping in a simple manner. No need to make life more complicated than it already is.

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