Instructions for Filling Out Form 720

Instructions for Filling Out Form 720

Written by 
Pilot Team
August 21, 2023
Instructions for Filling Out Form 720

Instructions to Fill Out Form 720

This document offers a comprehensive guide on completing Form 720, the Quarterly Federal Excise Tax Return, for the period of March 2024. It covers various taxes, procedural aspects, filing deadlines, payment methods, and recordkeeping requirements, providing taxpayers with detailed instructions and additional material to ensure accurate and timely submissions.

In this article, we'll provide information on Form 720 and a step-by-step guide on how to fill it out, keeping it straight to the point.

What is Form 720?

Form 720, the Quarterly Federal Excise Tax Return, is used to report and pay excise taxes on various goods and services subject to federal excise taxes. The form includes attachments to report liability by IRS number and pay the excise taxes. Its purpose is to ensure that businesses accurately report and pay their excise tax liabilities on a quarterly basis.

The form is divided into several sections, including introductory material, general instructions, specific instructions, and additional material, which provide guidance on completing each part of the form, reporting different types of excise taxes, and claiming credits or refunds.

Who Must File Form 720?

Entities that need to file Form 720 are those that were liable for, or responsible for collecting, any of the federal excise taxes listed on Form 720, Parts I and II, for a prior quarter and haven't filed a final return, or are liable for, or responsible for collecting, any of the federal excise taxes listed on Form 720, Parts I and II, for the current quarter.

Form 720 Tax Filing Deadlines and Due Dates

  • For January, February, and March: due by April 30
  • For April, May, and June: due by July 31
  • For July, August, and September: due by October 31
  • For October, November, and December: due by January 31

If any due date falls on a Saturday, Sunday, or legal holiday, the return may be filed on the next business day.

Form 720 Late Payment Penalty

When it comes to late payment penalties for Form 720, the IRS generally imposes interest and penalties on late payments. However, the exact penalty amount depends on factors such as how late the payment is. To obtain precise information on penalties, it's essential to consult the IRS guidelines or contact the IRS directly.

Step-by-Step Instructions for Form 720

Step by step instructions for filling out Form 720 include:

  1. Identify the taxes you need to report: Determine which excise taxes apply to your situation based on your business activities.
  2. Gather necessary information: Collect all relevant information, including EIN, details of taxable products or services, and amounts.
  3. Complete the form: Start with the taxpayer information section, including your name, address, and EIN.
  4. Fill out Part I: Report taxes related to environmental taxes, communications, air transportation, fuel, retail, and manufacturers taxes as applicable.
  5. Fill out Part II: If applicable, report taxes related to patient-centered outcomes research fees, local transportation taxes, and other taxes listed in Part II.
  6. Complete Schedules A, T, and C if applicable: Schedule A for excise tax liability, Schedule T for two-party exchange information, and Schedule C for claims.
  7. Calculate your tax liability: Add up the taxes reported in Parts I and II to determine your total tax liability.
  8. Sign and date the form: Ensure that the form is signed by an authorized person.
  9. File the form: Submit Form 720 to the IRS by the due date, which is the last day of the month following the end of the quarter. You can file electronically or by mail.

How to Submit Form 720

To submit Form 720, follow the general and specific instructions provided by the IRS, which include guidance on filling out various parts of the form, making tax deposits, and completing any applicable schedules. Ensure that you file the form by the due date for each quarter to avoid penalties and interest, and keep accurate records to support your tax return and any claims for credits or refunds.

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