How to Prepare IRS Form

Step-by-Step Guide

1. 1

   Step 1: Review the nontaxable uses of fuel in IRS Publication 510

   The "Type of Use Table" lists the uses and assigns a numerical code for each type of use.
   
   For example, "On a farm for farming purposes" is coded as "1" and "Off-highway business use" is coded as "2."
   
   , If the fuel tax exceeds $750 in any given quarter, you can complete IRS Form 8849, Claim for Refund of Excise Taxes, to get a quarterly refund.
   
   You can also complete IRS Form 8849 at the end of any quarter that the total fuel tax for the year exceeds $750.
   
   For example, if the fuel tax for the first quarter was $650 and the fuel tax for the second quarter was $600, you can complete Form 8849 at the end of the second quarter and claim $1,250.
   
   Wait until the end of the tax year and prepare IRS Form 4136 for any annual fuel tax amount less than $750. ,,,,,
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   Step 2: Excise Taxes

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   Step 3: to determine if you qualify for a fuel tax credit.

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   Step 4: Keep accurate records of fuel purchases during the tax year

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   Step 5: including the following: Fuel suppliers' names and addresses Number of gallons purchased from each supplier Date the fuel was purchased Record the number of gallons used for each nontaxable purpose (use the numerical code from the "Type of Use Table")

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   Step 6: Track the fuel tax on a quarterly basis to determine whether to prepare IRS Form 4136 or IRS Form 8849.

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   Step 7: Enter type-of-use code in column (a) of Form 4136 and the number of gallons used in column (c).

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   Step 8: Multiply the tax rate shown on the form by the number of gallons used and enter the total in column (d) for each type of fuel.

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   Step 9: Add the credit amount for each type of fuel and write the total on line 17.

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    Step 10: Transfer the amount to line 70

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    Step 11: "Credit for federal tax on fuels

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    Step 12: " on your IRS Form 1040 and check box b.

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    Step 13: Attach IRS Form 4136 to your IRS Form 1040.

Detailed Guide

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