About Form 720, Quarterly Federal Excise Tax Return Internal Revenue Service

If you want to allow an employee of your business, a return preparer, or other third party to discuss your Form 720 with the IRS, check the “Yes” box on Form 720 under Third Party Designee. Also, enter the designee’s name, phone number, and any five digits that person chooses as their personal identification number (PIN). If you receive a notice about a penalty after you file this return, reply to the notice with an explanation and we will determine if you meet reasonable-cause criteria. Postal Service or a designated private delivery service to meet the “timely mailing as timely filing/paying” rule.

Lines 10 and 11. Sales by Registered Ultimate Vendors of Gasoline and Aviation Gasoline

Also, the total deposit for that semimonthly period must be at least 1/6 (16.67%) of the net tax liability reported for the lookback quarter. If communications, air transportation, and indoor tanning services taxes are collected but not paid to the U.S. Treasury or are willfully not collected, the trust fund recovery penalty may apply. Businesses that manufacture, import, or sell goods subject to excise taxes, such as fuel, airline services, tobacco, and alcohol, must file Form 720.

When recapturing, you must pay a tax on each gallon of second generation biofuel at the rate you used to figure the credit. The tax on indoor tanning service is 10% of the amount paid for that service. The tax is paid by the person paying for the indoor tanning service and is collected by the person receiving payment for the indoor tanning services. It applies to bows having a peak draw weight of 30 pounds or more. The tax is also imposed on the sale of any part or accessory suitable for inclusion in or attachment to a taxable bow and any quiver, broadhead, or point suitable for use with arrows described below. Add the tax on each sale during the quarter and enter the total on the line for IRS No. 44.

• You should consult your own legal, tax or accounting advisors before engaging in any transaction.
• Enter the amount from Form 6627, Part IV, line 4, column (d), on the line for IRS No. 20.
• It’s highly recommended to consult with a tax professional to ensure that taxes are properly calculated and reported.
• If you are a paid preparer, enter your Preparer Tax Identification Number (PTIN) in the space provided.
• We provide a detailed outline of these crucial dates to help businesses maintain timely compliance in their tax preparation and submission processes.

Schedule T is used to report two-party exchange information, specifically for transactions involving the exchange of taxable fuel between registered entities. Part III also allows you to compare the total tax due with the deposits you’ve already made during the quarter. This helps ensure that you’ve paid the correct amount of tax and aids in identifying if you owe additional taxes or are eligible for a refund. The retail excise tax mainly applies to certain heavy vehicles and parts.

• Read our guides to Form 2848, Schedule C, Form W9, and Form 1099.
• When you file Form 720, you must also pay your balance due (from box 10 of Part III).
• Filing Form 720 electronically through an IRS-approved provider is fast, reduces errors, and provides immediate acknowledgment of receipt.
• For line 3a, the diesel must have been used during the period of claim for type of use 2, 6, 7, 8, or 12.
• You may pay the amount shown on line 10 by EFTPS, check or money order, or, if filing electronically, electronic funds withdrawal (direct debit).

See Patient-centered outcomes research (PCOR) fee (IRS No. 133), later, in Part II for special rules about who must file to report the PCOR fee. If you find yourself overwhelmed or uncertain about any aspect of Form 720, don’t hesitate to seek professional help. Keeping accurate records, filing your taxes on time, and understanding your responsibilities are key steps toward successful business management and fiscal responsibility. In Part III, you’ll summarize the taxes you’re liable for, based on the data you’ve already entered in Parts I and II of the form. This is where you consolidate all your tax information for the quarter including Schedule C if you filled that one too. At Taxfyle, we connect individuals and small businesses with licensed, experienced CPAs or EAs in the US.

Credits & Deductions

Whether you’re running a fuel distribution company, an air transport service, or even a local tanning salon, excise taxes are part of your tax responsibilities. Understanding how the form works, who must file, and how to avoid mistakes can protect your business from costly penalties. If you’re unsure, don’t take chances — get help from a qualified tax professional or trusted partner like My Count Solutions. For the semimonthly period for which the additional deposit is required (September 1–11 and 16–26), the additional deposit must be at least 11/90 (12.23%) of the net tax liability reported for the lookback quarter.

Who Must File Return to Top

The information provided on this website does not, and is not intended to, constitute legal, tax or accounting advice or recommendations. All 720 form instructions information prepared on this site is for informational purposes only, and should not be relied on for legal, tax or accounting advice. You should consult your own legal, tax or accounting advisors before engaging in any transaction. The content on this website is provided “as is;” no representations are made that the content is error-free.

For more information, see Surtax on any liquid used in a fractional ownership program aircraft as fuel (IRS No. 13), later. Please note that while there are federal excise taxes on alcohol and tobacco, you don’t file the forms with the IRS but with TTB. Top We ask for the information on these forms in order to carry out the Internal Revenue laws of the United States. Miscellaneous excise taxes are imposed under Subtitle D of the Internal Revenue Code. See Alternative method (IRS Nos. 22, 26, 27 and 28), below. Top You can electronically file Form 720 through any electronic return originator (ERO), transmitter, and/or intermediate service provider (ISP) participating in the IRS e-file program for excise taxes.

You may pay the amount shown on line 10 by IRS Direct Pay, EFTPS, check or money order, or, if filing electronically, electronic funds withdrawal (direct debit). If you pay by IRS Direct Pay, EFTPS or direct debit, don’t file Form 720-V. You may be required to file Form 720-X, Amended Quarterly Federal Excise Tax Return, now that the TD is published to report revisions to your originally reported section 5000D liability. The tax rate for second generation biofuel is $1.01 per gallon.

What is an excise tax?

The deposit of tax for a semimonthly period is due by the 14th day following that period. If you owe other federal tax, interest, or penalty, the overpayment on line 11 and line 7 will first be applied to the unpaid amounts. The tax is $1.00 per gallon of biodiesel, agri-biodiesel, and renewable diesel. An additional $.10 is added if the agri-biodiesel benefited from the small agri-biodiesel producer credit. Fill in the number of gallons and the appropriate rate in the Rate column on the line for IRS No. 117. The tax on an electric outboard motor is 3% of the sales price.

When you’re a Pro, you’re able to pick up tax filing, consultation, and bookkeeping jobs on our platform while maintaining your flexibility. Get started with Taxfyle today, and see how filing taxes can be simplified. If you have adjustments to liabilities reported for prior quarters, see Form 720-X, Amended Quarterly Federal Excise Tax Return. On Part III of IRS Form 720, you’ll calculate your total taxes by adding the totals from Part I and Part II and putting the sum in box 3. Once you’ve completed any appropriate columns in Schedule C, add up your final total on the last Schedule C page and enter it on line 15.

Specific Instructions Return to Top

You are liable for the tax on the fuels listed below when they are delivered into the fuel supply tank of a motor vehicle or motorboat. Use the following table to determine the tax for each gallon. Fill in the number of gallons and the appropriate rate in the Rate column on the line for IRS No. 79. If more than one rate applies, leave the Rate column blank and attach a schedule showing the rates and number of gallons taxed at each rate.

Generally, EFTs are made using the Electronic Federal Tax Payment System (EFTPS). Additionally, as of October 2024, taxpayers can use IRS Direct Pay to make payments directly from their checking or savings accounts, without registering or enrolling with EFTPS. IRS Direct Pay for businesses is a free and secure payment application available at IRS.gov/Directpay. If you don’t want to use EFTPS or IRS Direct Pay, you can arrange for your tax professional, financial institution, payroll service, or other trusted third party to make deposits on your behalf.