IFTA - 4 Step Guide On How To Calculate Mileage + Fuel Tax (2022)

Calculating IFTA is among the most time consuming and tedious tasks that you will do as a fleet manager or individual truck driver – especially if you are still using paper logs.

Whether it’s your first time filing an IFTA report or your 50th, we’re here to show you the easiest way to file your fuel tax return – with or without an automated IFTA mileage calculator.

What you will learn by the end of this article:

  • Step by step guide on the traditional method of calculating your IFTA tax
  • How you can save hours with an Automated IFTA Mileage Calculator
  • When you need to complete your returns
  • Preparing for audit

If you want to skip mileage calculations and access auto-generated reports, click here.

Pretty straightforward right? Let’s get started.

IFTA - 4 Step Guide On How To Calculate Mileage + Fuel Tax (1)

This is the most tedious step in the entire process – that’s why we’re going to take you through 3 different methods of calculating your mileages.

  1. Manually tracking your odometer readings (~2 hours/truck)
  2. Using a trip mileage calculator (~1.5 hours/truck)
  3. Leverage a fully automated IFTA mileage reporting solution (2 minutes)

Method 1: Manual Tracking

Let’s start with the traditional and most time consuming method. Get out your pen, paper, and calculator – we’re going to be adding up a lot of numbers.

Documentation you will need:

  1. An accurate record of your state-by-state (or province) miles for this quarter’s report
  2. Your fuel receipts for each individual state/province
  3. The most recent IFTA tax rates for this quarter (or an automated tool)

*Click on method to jump to section

Calculate IFTA mileage per state, per trip

You will need to keep track of how many miles were traveled in each state or province.

Make sure to record your odometer reading when:

  • You cross a state/province border
  • You refuel

Now, for each corresponding entry and exit for a particular state or province, make sure you subtract the ending odometer reading from the entry reading. This will give you the miles traveled for that state, for that instance.

Miles in [State/Prov] = Exit Reading in [State/Prov] Entry Reading in [State/Prov]

(Video) Excel Ifta Mileage Calculator

As a result, you will have a mileage number for each time your truck entered a new state.

Total mileage per state/province

Group and add together all your mileages for each state/province your truck has traveled in.

For example, say your truck has entered Washington 3 times in the last quarter:

IFTA - 4 Step Guide On How To Calculate Mileage + Fuel Tax (2)

You would add up the mileage for each entrance, resulting in a total of 3654milesin Washington for this reporting quarter.

Repeat this step for each state.

Total mileage for entire quarter

The last step in terms of mileage calculations is recording the total mileage for the entire quarter

To do this, add up all the miles traveled from every state for the quarter – this number will be used in the next step of the process.

Before we jump to Method #2, let’s quickly review the benefits and downsides of manually tracking your IFTA mileages.

Quick Recap - Manual Tracking

Benefits:

  • Accurate odometer readings
  • “Free” – Doesn’t account for hours spent on calculations

Cons:

  • Human error – easy to forget to record odometer reading or make mistakes when adding up mileages
  • Most time consuming method – may take daysto complete for each truck
  • Doesn’t scale – the more trips/trucks, the longer it takes

Instead of keeping track of your odometer readings every time your truck enters and leaves a province, you can use a trip mileage calculator tool to help estimate the miles traveled for every trip.

You can use a tool such as DirectFreight’s online mileage calculator if you choose to go with this method of performing IFTA mileage calculations.

Collect all your trips

The first thing you’ll want to do is keep track of every individual trip your truck went on. For audit purposes, you would want to also keep track of your starting and ending odometer reading for each trip.

Once you have organized the information from all your trips in the 3 month reporting quarter, we’re ready for the next step.

(Video) How to Complete IFTA Reporting

Enter start and end point

For each trip, using the trip calculator of your choosing, input the starting location and the destination. Certain calculators will ask you for routing preferences as well, which may help improve the accuracy of the estimated mileage.

Record trip mileage per state/province

The mileage calculator you use should then present you with a route, as well as the miles traveled in each state/province.

Record the mileage for each state/province individually on a spreadsheet, as you’ll need to add all miles traveled for a particular state across all your trips.

Repeat until you've done this for all trips

Quick Recap - Trip Mileage Calculator

Benefits:

  • You don’t need to keep track of odometer readings at each entry and exit of state borders
  • Free mileage calculators online

Cons:

  • Lack of accuracy – uses estimates for miles per state
  • Human error – mistakes can easily be made when adding up mileages from each trip report
  • Time required – anywhere from acouple hours to a day per truck
  • Doesn’t scale – the more trucks, the more days it may take

As we’ve showed you above, it can take days or even weeks (for larger fleets) to calculate your mileages for a single reporting quarter. Whether you go with the completely manual method of recording odometer readings, or trip mileage calculators, there are drawbacks to each solution.

That brings us to the third and final option.

What if you could get an auto-generated report that takes less than a minute to generate? With Switchboard, that is exactly what we offer with our IFTA Automation feature.

For fleets, we automatically add the mileages per state/province for every truck. This allows for scalability and efficiency as teams grow.

IFTA - 4 Step Guide On How To Calculate Mileage + Fuel Tax (3)

You can also see a breakdown for each individual truck’s mileage report, which is extremely important for transparency, as well as in the event you get audited.

IFTA - 4 Step Guide On How To Calculate Mileage + Fuel Tax (4)

You can easily choose any monthly date range.

IFTA - 4 Step Guide On How To Calculate Mileage + Fuel Tax (5)

And we make it easy for you to export or print the reports you want.

IFTA - 4 Step Guide On How To Calculate Mileage + Fuel Tax (6)

Benefits:

  • No manual odometer tracking
  • No mileage calculations
  • No human input/calculation error
  • Pinpoint accuracy – automatically tracks your odometer reading and location
  • Scales with you – generates report within a minute for any sized fleet
(Video) How to file fuel tax return: IFTA calculations, fillings and permits

As with all our trucking and fleet management solutions, our mission is to make things easier.

Whether you manage your own truck, or have to file IFTA reports for a fleet of hundreds, getting the mileage report you need takes just a few simple clicks.

Set up a 5 minute demo and free trial today.

IFTA - 4 Step Guide On How To Calculate Mileage + Fuel Tax (7)

Now that we have one of the most tedious parts of calculating your IFTA, let’s move on to the next step.

Add up the number of gallons of fuel you’ve purchased in each state. It’s important to note that even if you don’t buy any fuel in a particular state that you need to include in your report, fuel tax will still be calculated.

First, you need to calculate how many gallons of fuel you burnt per mile traveled (fuel mileage).

1. Add up the total number of gallons of fuel you have purchased (while you’re at it, jot down how much fuel tax you paid in each state – more on this in later)

2. Add up the total number of miles traveled across all states

3. Divide the total number of gallons of fuel by the total number of miles

Fuel Mileage= Total # of gallons of fuel÷Total Mileage

Now that you have your Fuel Mileage, you can calculate how much fuel you’ve burnt in each state.

4. Multiply your fuel mileage by the miles driven in each state (from step 2)

Fuel Usage for [State/Province]= Fuel Mileage x Miles Driven in [State/Province]

Calculating the total IFTA fuel tax amount

The last step is to find the difference between the fuel tax you need to pay and the fuel tax you have already paid.

To calculate the tax required for each state/province, you will need to look at the tax rate for that region.

Fuel Tax Required for [State/Prov.]=Fuel Usage for [State/Prov.] X Tax Rate for [State/Prov.]

You can refer to this IFTA rate table at: https://www.iftach.org/taxmatrix4/choose_tableqnew.php.

Special Surcharges: Some states require an additionalsurcharge fee (Indiana, Kentucky, and Virginia). This is calculated in the same way as above, except you multiply your Fuel Usage by the Surcharge Rate this time.

IFTA - 4 Step Guide On How To Calculate Mileage + Fuel Tax (8)

Remember in step 3 where we suggested you write down how much fuel tax you paid in each state? Now it’s time for us to put that to use.

The amount of tax you owe per state/province:The fuel tax required for each state/province minus how much you have already paid in fuel tax for that province.

(Video) Paying IFTA FUEL taxes made simple easy explanation

Fuel Tax Owed for [State/Prov.]= Fuel Tax Required [State/Prov.] — Paid[State/Prov.]

If you get a negative value for Fuel Tax Owed, don’t worry. It simply means you’ve paid more tax in that state than you actually burnt in fuel.

This one’s simple.

All you have to do is add together the Fuel Tax Owed we just calculated for all states, and including any negative values from there.

Total Fuel Tax Owed= Sum of tax owed in every state

Depending on your state, you may either have an online IFTA filing portal, or you may be required to do a paper filing.

Regardless, you now have all the information required to make that process hassle free.

You will need to file your IFTA return every quarter.

To keep it simple, here’s a chart that will show you when you need to file your IFTA return by.

IFTA - 4 Step Guide On How To Calculate Mileage + Fuel Tax (9)

Audits can be daunting.

Some companies have lost thousands of dollars in fines and penalties, or worse, closed down their businesses, due to findings from IFTA audits.

It is important that you understand the IFTA regulations clearly, and have a robust measurement and reporting process that is considered transparent and sufficient by their standards.

Beyond just looking at the reports, they will rigorously analyze your process. Here are a few of the steps they undergo:

  1. They will need to understand the ins and outs of your IFTA reporting process
  2. If the auditor discovers any gaps in the process, they will perform a
  3. Test of Compliance – If the way they collect IFTA data is inadequate, the auditor will go through your report in more detail, to ensure you are compliant
  4. If they deem your process or data unreliable, they have the authority to report it to your licensee

This is why we recommend you either build out an error proof documentation and reporting process, or leverage a simple and robust solution like Switchboard IFTA Automation to help save you time while keeping you compliant.

Make sure you give yourself enough time to collect all the documentation you’ll need for filing your IFTA report. We know this process can be quite tedious and time consuming, so hopefully this article helped alleviate some headache.

If you want to save time and simplify your own IFTA reporting process, make sure to request a demo of our IFTA Automation solution, and our team will get you set up with a free trial should you want to give it at try.

Looking for other other easy-to-use, time and money saving fleet management / ELD compliance solutions? Clickhere.

(Video) IFTA Made Easy - Step by Step Creating Google Doc Tracking Sheet

FAQs

How do you calculate IFTA? ›

How to Calculate IFTA Tax: Fuel Tax Reporting
  1. Total Miles Driven in Each State/Province X ÷ Overall Fuel Mileage = Fuel Consumed in Each State/Province X.
  2. Fuel Tax Required in Each State/Province X – Fuel Tax Paid in Each State/Province X = Fuel Tax Still Owed to Each State/Province.
  3. Extra Tips for IFTA Fuel Tax Reporting.

What is Kentucky IFTA surcharge? ›

What is “IFTA Surcharge” Only three States currently collect an additional fee via a surcharge line on the IFTA reporting form. They are Virginia, Indiana and Kentucky. These rates currently vary from 3.5 to 11 cents per gallon.

How long does it take to get IFTA stickers in Maryland? ›

After your application has been submitted, we will review your application within two weeks. You will receive an email when you submit the application, and when it has been approved or denied. If your application is approved, decals and a license will be mailed to you.

How do I get Ifta in Texas? ›

To be issued a Texas IFTA license, Texas must be your base jurisdiction. For Assistance - If you have any questions about this application, filing tax returns or any other tax-related matter, contact the Texas State Comptroller's office at 1-800-252-1383. We process applications in the order they are received.

How do I calculate IFTA in Excel? ›

Excel Ifta Mileage Calculator - YouTube

What is the difference between IFTA miles and taxable miles? ›

To recap, Total Miles include IFTA Miles, Non-IFTA miles, and exemption miles. Total IFTA miles do not include Non-IFTA miles. Total Taxable miles do not include applicable exemption miles. The miles left after removing the Non-IFTA miles and non-taxable miles are the miles you need for calculating your IFTA report.

How is fuel surcharge calculated on a truck? ›

The calculation looks like this: Original fuel price - Updated fuel price = Difference in fuel cost. Difference in fuel cost / Miles per gallon = Cost per mile. Cost per mile x Distance travelled = Surcharge.

How do I file my IFTA taxes in Kentucky? ›

  1. STEP 1: Login and Access your Account. Launch your browser and enter https://ky.iftaipc.com. ...
  2. STEP 2: Start the Return and your Complete Fuel.
  3. STEP 3: File your Return. Once you've completed your Fuel Schedules, the In Progress.
  4. STEP 4: View your Invoice and Make a Payment. The License Summary page will be displayed.

What are taxable miles? ›

Taxable Miles . Means all miles operated by qualified vehicles subject to a jurisdiction's fuel tax requirements. Miles operated under trip permits generally are exempt from fuel tax requirements.

How do I file an IFTA tax in Maryland? ›

You can apply for your Maryland IFTA License online or download and complete the License Application Form for the International Fuel Tax Agreement (IFTA) and submit it to the Comptroller of Maryland.

How do I get an IFTA sticker in Maryland? ›

In order to receive an IFTA license you are required to fill out an application for the Comptroller of Maryland, Revenue Administration Division. All IFTA decals and applications are issued at no cost.

What are apportioned plates? ›

Prorate plates are licence plates issued for commercial vehicles that regularly travel into two or more jurisdictions in Canada or the U.S. The plates exempt carriers from having to buy trip permits when they enter a jurisdiction.

How long does it take to get IFTA in Texas? ›

There is no fee for the Texas IFTA license and decals. Once the application is received, if any additional information is needed you will be contacted by phone, so be sure to provide a phone number where you can be reached. It will take 3-4 weeks to receive your license and decals in the mail.

What does IFTA mean in trucking? ›

The International Fuel Tax Agreement — also known as IFTA — is a fuel tax collection and sharing agreement for the redistribution of fuel taxes paid by interstate commercial carriers. There are 58 member jurisdictions of IFTA, including 48 American states and 10 Canadian provinces.

How do I manually calculate IFTA? ›

First, you need to calculate how many gallons of fuel you burnt per mile traveled (fuel mileage).
  1. Add up the total number of gallons of fuel you have purchased (while you're at it, jot down how much fuel tax you paid in each state – more on this in later)
  2. Add up the total number of miles traveled across all states.
Jun 9, 2020

How are taxable miles calculated? ›

For example, if you drove your vehicle 1,000 miles for IRS-approved business purposes in 2021, multiply 1,000 miles x $0.56 per mile. You'll be able to deduct $560. If you choose this method, you'll need to log your miles to calculate your deduction at the end of the year.

What is the average mpg for IFTA? ›

Reported average miles per gallon are expected to fall between 5 to 10 MPG for trucks and remain relatively the same each reporting period. If your metrics are outside this range or vary drastically from one quarter to the next, be sure to give an explanation as to why.

Do you count empty miles on IFTA? ›

Not reporting personal or unloaded miles: Remember, all miles must be recorded, whether loaded, empty or bobtail.

What's the difference between taxable gallons and tax paid gallons? ›

Tax-paid gallons means the number of gallons placed into any propulsion tank of qualified motor vehicles, and upon which tax has been paid to the jurisdiction where the fuel was purchased. Taxable gallons mean the number of gallons used in each jurisdiction during the quarter.

Is New Mexico part of IFTA? ›

The New Mexico Commercial Vehicle Bureau is responsible for the licensing and registration of motor carriers in the International Fuel Tax Agreement (IFTA).

What is the formula for fuel surcharge? ›

Here is how a fuel surcharge is calculated: Original Fuel Price — Updated Fuel Price = Difference in Fuel Cost. Difference in Fuel Cost / Miles Per Gallon = Cost Per Mile. Cost Per Mile x Distance Traveled = Surcharge.

How do you calculate fuel cost per mile? ›

Gas rate = price per gallon divided by miles per gallon = price per mile.

How do you calculate fuel cost? ›

First, divide the distance of the route by your miles per gallon figure to discover how many gallons of gas you will need, then multiply the number of gallons by the price of gas.

What is kyu tax? ›

KYU is a tax license issued for all carriers traveling on Kentucky roadways with a combined license weight greater than 59,999 pounds. The tax rate is $0.0285 cents per mile.

What is a kyu number? ›

A KYU number is a tax license number issued for the Kentucky Weight Distance Tax. Under KRS 138.660(3)​​, any carrier over 59,999 pounds traveling in Kentucky is subject to this tax.

Can you deduct mileage on taxes? ›

Individuals who own a business or are self-employed and use their vehicle for business may deduct car expenses on their tax return. If a taxpayer uses the car for both business and personal purposes, the expenses must be split. The deduction is based on the portion of mileage used for business.

Can you write off mileage if you get reimbursed? ›

Although you will pay income tax on your reimbursements, you can deduct all mileage expenses despite receiving reimbursements.

Are mileage stipends taxable? ›

If the employer pays a per diem or mileage allowance and the amount paid exceeds the amount the employee substantiated under IRS rules, you must report the excess as wages on Form W-2. The excess amount is subject to income tax withholding and Social Security and Medicare taxes.

Why would I get a letter from Comptroller of Maryland? ›

If you have not paid your taxes due in full, or have not filed a Maryland return that we believe you should have, you will receive an income tax notice from the Comptroller of Maryland. If you do not respond to the first notice, an assessment notice will be issued.

What is Maryland sales tax? ›

State sales taxes apply to purchases made in Maryland while the use tax refers to the tax on goods purchased out of state. Businesses in Maryland are required to collect Maryland's 6 percent sales tax and or 9 percent alcoholic beverage tax from you whenever you make a taxable purchase.

Where do I send my Maryland state taxes? ›

You may submit paper tax forms and payments at any of the local branch offices between 8:30 a.m. - 4:30 p.m., Monday through Friday. If you are sending a Form 502 or Form 505 (with a payment) through the US Postal Service, send it to: Comptroller of Maryland, Payment Processing, PO Box 8888, Annapolis, MD 21401-8888.

How do I manually calculate IFTA? ›

First, you need to calculate how many gallons of fuel you burnt per mile traveled (fuel mileage).
  1. Add up the total number of gallons of fuel you have purchased (while you're at it, jot down how much fuel tax you paid in each state – more on this in later)
  2. Add up the total number of miles traveled across all states.
Jun 9, 2020

How are taxable miles calculated? ›

For example, if you drove your vehicle 1,000 miles for IRS-approved business purposes in 2021, multiply 1,000 miles x $0.56 per mile. You'll be able to deduct $560. If you choose this method, you'll need to log your miles to calculate your deduction at the end of the year.

What is IFTA in trucking? ›

IFTA stands for The International Fuel Tax Agreement. IFTA is an agreement between the lower 48 states and 10 Canadian provinces to help simplify fuel tax collection and reporting for interstate commercial carriers.

Videos

1. Mileage and Fuel Purchase Reports
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2. IFTA Made Simple: Making IFTA Understandable
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3. How to use CoPilot V8 to calculate state miles for IFTA and auto upload to the calculator
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4. What is IFTA? How to calculate IFTA? Fuel Tax
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5. How to File an International Fuel Tax Agreement (IFTA) Quarterly Fuel Use Tax Return
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6. How To File Quarterly IFTA Report | IFTA Fuel Tax | Trucking 101
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