{"id":26421,"date":"2022-12-30T03:11:00","date_gmt":"2022-12-30T03:11:00","guid":{"rendered":"https:\/\/businessyield.com\/?p=26421"},"modified":"2023-02-05T15:34:07","modified_gmt":"2023-02-05T15:34:07","slug":"form-720","status":"publish","type":"post","link":"https:\/\/businessyield.com\/finance-accounting\/form-720\/","title":{"rendered":"FORM 720 (Excise Taxes): Instructions and Guidelines","gt_translate_keys":[{"key":"rendered","format":"text"}]},"content":{"rendered":"\n
If you own a business that sells goods and services subject to excise tax, you must file a Form 720 with the IRS quarterly.
The federal government levies an excise tax on some types of goods and services, which is similar to a state sales tax in some aspects. However, you may be unaware that you are paying this tax because it is frequently included in the price of commodities, such as gasoline for your automobile. Businesses that sell products and services that are subject to excise tax must file a Form 720 with the IRS quarterly. Let’s see the instructions on how to file Form 720 and the excise taxes. <\/p>\n\n\n\n
IRS Form 720, Quarterly Federal Excise Tax Return, is a tax form used by businesses to report and pay federal excise taxes quarterly. If your company sells goods or services that are subject to excise tax, you must report and pay the taxes using IRS Form 720.<\/p>\n\n\n\n
IRS Form 720 is divided into three sections, as well as sections for Schedule A, Schedule T, and Schedule C, as well as a payment voucher (called Form 720-V). If your company is required to file Form 720, you must do so quarterly and can do so electronically or by mail. Payments for excise taxes, on the other hand, are due semimonthly and must be done via electronic money transfer.<\/p>\n\n\n\n
An excise tax is a tax levied by the federal government on specified commodities or services manufactured in the United States or imported into the country. Excise taxes are frequently included in the cost of goods such as fuel or alcohol.<\/p>\n\n\n\n
The federal government collects excise taxes on a wide range of goods and services. A surcharge on indoor tanning, gasoline, airline tickets, and a variety of coal products are among the most common products and services subject to the excise tax. Because the excise tax is normally included in the price, it is the seller’s or manufacturer’s responsibility to remit these tax payments to the federal government and file Form.<\/p>\n\n\n\n
If your company sells goods or services that are subject to excise taxes, you must file IRS Form 720. These items and services may include, but are not limited to, the following:<\/p>\n\n\n\n
Form 720 outlines all of the goods and services that necessitate the payment of excise taxes by a firm. If your company does not sell any of the products or provide any of the services listed on the form, you are not subject to excise taxes and do not need to fill out this tax form.<\/p>\n\n\n\n
Two more factors influence whether you must complete Form 720:<\/p>\n\n\n\n
Although excise taxes are required for alcohol, tobacco, and guns, they are not covered by IRS Form 720. The Alcohol and Tobacco Tax and Trade Bureau regulates these products, and taxes must be filed using the return form available on their website.<\/p>\n\n\n\n
Form 720 has a line for each sort of excise tax that you may be required to pay. The vast majority of excise taxes are levied based on unit sales or weight.<\/p>\n\n\n\n
For example, various types of diesel fuel demand around 24 cents per gallon. Simply enter the number of gallons sold and multiply it by the rate per gallon for this type of product.<\/p>\n\n\n\n
Form 720, Quarterly Federal Excise Tax Return, is also available for electronic filing as an alternative. Simply choose an IRS-approved software provider and join millions of other taxpayers who benefit from the convenience and ease of online filing, prompt acknowledgment of receipt, and speedier service.<\/p>\n\n\n\n
If you owe excise tax when you file Form 720, the IRS requires you to pay by electronic funds transfer. To avoid fines, make sure your payment reaches the IRS before the deadline. This necessitates starting the transfer by 8 p.m. (EST) one day before the due date. The IRS requires you to make these deposits more regularly than you must file the form.<\/p>\n\n\n\n
In general, most excise taxes must be paid semi-monthly. However, if the amount of excise tax is less than a specific threshold, the IRS will enable you to postpone payment until you have accumulated a substantial excise tax burden.<\/p>\n\n\n\n
Businesses must file IRS Form 720 quarterly. The IRS Form 720 instructions break down the deadlines into a handy chart, which we’ve re-created here:<\/p>\n\n\n\n