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IRS Form 720, or the Quarterly Federal Excise Tax Return, is an IRS tax form that businesses must complete every quarter to report and pay federal excise taxes. An excise tax is a tax that the federal government imposes on specific goods or services that are manufactured in or imported into the U.S. Excise taxes are often included in the price of the product, such as gasoline or alcohol, so you might not even realize you're paying them. However, if your business sells a good or service that is subject to excise tax, you are responsible for reporting and paying those taxes; IRS Form 720 allows you to do so.
IRS Form 720 consists of three parts, as well as Schedule A, Schedule T, and Schedule C sections. If your business is responsible for completing Form 720, you must do so quarterly and can file electronically or by mail. Payments for excise taxes, however, are required on a semi-monthly basis and should be made by electronic funds transfer.
You are liable to file Form 720, the federal excise tax return, every quarter when you offer a service or sell a product or goods that have an excise tax component. Excise taxes are due for every quarter in a year, and the table below indicates the actual due dates. If the due date falls on a weekend or a federal holiday, you should file on the next business day.
Take a look at the table below to know when you need to file your excise tax.
| Months | Due Date |
|---|---|
| Jan, Feb, Mar | Apr 30 |
| Apr, May, Jun | Jul 31 |
| Jul, Aug, Sep | Oct 31 |
| Oct, Nov, Dec | Jan 31 |
File a final return if you have been filing Form 720 and you:
IRS excise tax form comprises several sections, and understanding them makes your tax filing process smoother. Here's a brief overview of the various sections involved in Part I of IRS Form 720.
Dealers and sellers of crude oil, imported petroleum products, and ODCs are required to file this excise tax return.
If you're using local telephone services and teletypewriter exchange service, you are liable to file this Quarterly Federal Communication Tax.
Air transportation Tax must be filed by the airline company, providing a consolidated report about the passengers and the property handled on flights. Additionally, the usage of transportation facilities should be reported in this excise tax form.
This includes the use and sale of diesel, kerosene, gasoline, and LNG.
All manufacturers and sellers of highway vehicles, such as buses, heavy trucks, and truck tractors should file under this category.
The IRS imposes a tax on certain ship voyages. This tax is applied annually to the person organizing the voyage.
Foreign issuers issuing policies such as indemnity bonds and casualty insurance are included.
Yes, there is a Part II in Form 720, which includes sports fishing equipment, arrow shafts, fishing roles and poles, use of fuel on inland waterways, Indoor tanning services, LUST tax on inland waterways fuel use, Inland waterways fuel use tax, and electric outboard motors.
On Part III of IRS Form 720, you should calculate your total taxes by adding the totals from Part I and Part II. If Schedule C is filled, you’ll add the amount of your total claim along with deposits made for the quarter and Overpayment from previous quarters. If total tax is greater than the sum of the total claim, deposits, and overpayments; Balance due should be paid with your return filing of Form 720. On the other hand, if the total tax is less than the additional amount of total claim, deposits, and Overpayment, you'll be able to indicate what you wish to do with the overpayment difference. You can either apply the amount to your next return or have it refunded to you.
Schedule A in IRS form 720 helps you list the deductions, which include various categories of expenses such as medical and dental, charitable gifts, theft losses, and taxes. For easy and hassle-free, filing of Schedule A you should file it through eFile 720 and preserve the documents of the expenses made during the year in your registered account.
Also known as the two-party exchange information reporting is imposed on diesel fuel used in the terminal, or delivered within a terminal. The same rule applies to the usage of kerosene, gasoline, and aviation gasoline.
To report loss or profit of the business you own or the profession you handle, you need to file Schedule C. Here, you can explain your wages, expenses, income, and deductions.
If you have someone filing your Form 720 for you, they are 33. considered paid preparers. They need to enter their name, PTIN, Firm Name, EIN, Date, Contact Number, and address in Form 720. Additionally, they need to attach Form 8453-EX since an electronically transmitted return will not be considered complete or filed unless Form 8453-EX is signed by the taxpayer and Paid preparer, scanned into a PDF file, and enclosed with the return. The IRS requires tax preparers to authenticate each one of their clients.