Is It mandatory to file Form 720 every quarter

Form 720, also known as the Quarterly Federal Excise Tax Return, is used by businesses to report and pay excise taxes on specific goods and activities. Excise taxes are indirect taxes often included in the price of goods, so consumers may not always realize they are paying them.

Businesses involved in certain activities or selling specific products are generally required to file Form 720. Common categories subject to excise tax include:

• Alcohol

• Automobile fuel

• Airline tickets

• Highway usage

• Indoor tanning services

• Tobacco products

• Health-related goods and services

• Manufacturing

Form 720 must be filed with the IRS quarterly to report and remit the excise taxes due.

Should Excise Tax be filed every quarter?

Yes! Form 720, the Quarterly Federal Excise Tax Return, must be filed every quarter in a year as it covers the excise taxes due for each quarter. The due dates for filing Form 720 are outlined below:

Each filing is due by the end of the month following the quarter’s end, ensuring that businesses stay current with their excise tax obligations throughout the year.

Is it mandatory to file Form 720 every quarter?

Yes, if your business is required to pay excise taxes using Form 720, it is mandatory to file it every quarter. Filing Form 720 on a quarterly basis is essential for several reasons:

Benefits to the Government:

• Regulation and Control: Beyond revenue collection, Form 720 serves a regulatory purpose. It helps the government monitor and control the consumption of certain products, thereby reducing potential harm to public health and the environment.

Benefits to Businesses:

• Compliance and Commitment: Timely and accurate filing of Form 720 shows that a business is committed to complying with federal regulations, which can enhance its reputation and credibility.

• Avoiding Penalties: The IRS imposes penalties for late filing or underpayment of excise taxes. By filing on time and ensuring accurate calculations, businesses can avoid financial penalties and interest charges.

• Financial Record-keeping: Proper payment and filing provide a clear and organized record of transactions, which can be valuable for audits, financial reviews, and maintaining overall financial transparency.

Thus, consistent quarterly filing not only meets legal requirements but also supports the business in maintaining good standing with tax authorities.

How to Pay Excise Tax with Form 720?

You can file Form 720 in two ways:

1. Manual Filing:

• Fill out the form by hand and mail it to the IRS.

• This method is time-consuming and requires careful attention.

2. Online Filing:

• Use an IRS-approved online portal to file quickly and efficiently.

• The IRS recommends online filing as it saves time and reduces effort.

Online filing is faster, easier, and preferred by the IRS.

How to pay Form 720 Online with efile720:

Account Creation:

• Create a new account if you are a new user, or log in if you already have an account.

Business Details:

• Enter your business name, type, and EIN (Employer Identification Number).

Tax Details:

• Choose the correct form type, tax year, and quarter.

Payment:

• Select your preferred payment method and complete the filing process.

Refer to our blog on how to file Form 720 electronically for detailed step by step guide. 

WRAP:

By reading the blog, you will learn whether Form 720 needs to be filed every quarter and understand the importance of submitting it before the due dates.