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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. Attach your Form 7208 to your Form 720, due for the first full quarter after the close of your tax year. Report the average number of lives covered in column (a). The person who paid the first tax must do all of the following. If a segment is to or from a rural airport, the domestic segment tax doesn’t apply.

It’s essential to download the most recent version of Form 720 before filing, as the IRS periodically releases updated versions. To ensure accuracy and compliance, we highly recommend downloading the latest version directly from the official IRS website. The Inflation Reduction Act of 2022 extended several excise fuel incentive credits through December 31, 2024. TAS works to resolve large-scale problems that affect many taxpayers. If you know of one of these broad issues, please report it to them at IRS.gov/SAMS. The Taxpayer Bill of Rights describes 10 basic rights that all taxpayers have when dealing with the IRS.

Pro Tips for Filing IRS Form 720 Efficiently

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. 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. The tax on surface mined coal is the lower of $.55 per ton or 4.4% of the sales price.

Indoor Tanning Services Tax

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. 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.

• The IRS accepts electronic filing of Form 720 through approved software providers.
• Ryan also previously oversaw the production of life science journals as a managing editor for publisher Cell Press.
• Unlike general income tax, excise taxes apply only to certain products or services — think fuel, airline tickets, indoor tanning, and manufacturing of specific equipment.
• The inland waterways fuel use tax applies at the rate listed on Form 720.
• But even if you’re not a seasoned pro, navigating the ins and outs of Form 720 doesn’t have to be a daunting task.

The necessity to file Form 720 extends to businesses involved in specific goods and services subject to federal excise tax. Ascertaining whether your business operations mandate filing Form 720 is the first crucial step in ensuring compliance. Understanding the nuances of what constitutes ‘subject to excise’ and ‘subject to excise tax’ is paramount for businesses to determine their tax liabilities accurately. The 720 form is a critical document for businesses involved in specific industries.

If your business is responsible for any of those taxes, complete No. 2 of Schedule A. The Schedule A section of IRS Form 720 is for businesses that have a tax liability in Part I. If you don’t have liability from Part I but do have liability for Part II, you do not need to fill out Schedule A. If the due date for filing Form 720 falls on a weekend or legal holiday, you can file by the next business day. Increase your desired income on your desired schedule by using Taxfyle’s platform to pick up tax filing, consultation, and bookkeeping jobs. At Taxfyle, we connect individuals and small businesses with licensed, experienced CPAs or EAs in the US. We handle the hard part of finding the right tax professional by matching you with a Pro who has the right experience to meet your unique needs and will handle filing taxes for you.

Also, enter the designee’s name and phone number, and any five digits that person chooses as their personal identification number (PIN). Postal Service or a designated private delivery service to meet the “timely mailing as timely filing/paying” rule. Avoid these risks by filing on time and ensuring all taxes are properly paid. It’s crucial to fill out only the sections that apply to your business, as not every filer needs to complete the entire form. On the other hand, if box 9 is greater than box 3, you can indicate what you wish to do with the overpayment. You can apply the amount to your next return or have it refunded to you.

The net tax liability for a semimonthly period is the total liability for the period minus any claims allowed on Schedule C for the period. Net tax liability for a semimonthly period may be figured by 720 quarterly federal excise tax return dividing the net tax liability for the month by 2, provided this method of computation is used for all semimonthly periods in the calendar quarter. The regular method applies to all taxes on Form 720, Part I, except for communications and air transportation taxes if deposits are based on amounts billed or tickets sold, rather than on amounts actually collected.

Line 1. Nontaxable Use of Gasoline

The credit is based on the gallons of SAF in the qualified mixture. Any SAF mixture credit must first be claimed on Form 720, Schedule C, to reduce your taxable fuel liability reported on Form 720. For line 8b, claimant has a statement, if required, that contains the date of sale, the name and address of the buyer, and the number of gallons of kerosene sold to the buyer. For lines 8a and 8b, only one claim may be filed for any gallon of kerosene. For example, amounts billed in December, January, and February are considered collected during January, February, and March and are reported on Form 720 as the tax for the first quarter of the calendar year. The report must contain the name and address of the taxpayer, the type of facility provided or service rendered, the amount paid for the facility or service (the amount on which the tax is based), and the date paid.

• Interest also accrues on unpaid taxes and penalties from the due date until the date of payment, at a rate that changes quarterly.
• This claim is made in addition to the claim made on lines 9d and 9e for type of use 9.
• However, annual claims can’t be made for gasoline and aviation gasoline.
• Also, enter the designee’s name and phone number, and any five digits that person chooses as their personal identification number (PIN).
• If requirements 1–3 above aren’t met, see Annual Claims, later.
• Multiply the total number of gallons subject to tax on lines 60(a), 60(b), and 60(c) by $.244 and make one entry in the tax column.

How to Read and Understand 720 Form

A claim may be made for dyed diesel or dyed kerosene exported in a trade or business during the period of claim. Claims for exported gasoline blendstocks taxed at $.001 per gallon are made on line 14b. Generally, semimonthly deposits of excise taxes are required. A semimonthly period is the first 15 days of a month (the first semimonthly period) or the 16th through the last day of a month (the second semimonthly period). The tax is 6.25% of amounts paid for transportation of property by air.

Line 14e. Registered Credit Card Issuers

The deposit of tax for a semimonthly period is due by the 14th day following that period. Generally, this is the 29th day of a month for the first semimonthly period and the 14th day of the following month for the second semimonthly period. If the 14th or the 29th day falls on a Saturday, Sunday, or legal holiday, you must make the deposit by the immediately preceding day that isn’t a Saturday, Sunday, or legal holiday. You must deposit all depository taxes (such as excise tax, employment tax, or corporate income tax) by EFT.

Interest also accrues on unpaid taxes and penalties from the due date until the date of payment, at a rate that changes quarterly. If the deadline for filing a tax return falls on a Saturday, Sunday or legal holiday, the due date is the next business day. If a person claimed (or will claim) an amount of SAF on Form 8864, 8849, or 4136 for a credit or payment, then a claim can’t be made on Form 720 for that same amount of SAF. The qualified mixture must be used (or sold, in the ordinary course of a trade or business, for use) in an aircraft. For claims on lines 9d and 9e (type of use 14), attach a separate sheet with the name and TIN of each governmental unit to whom the kerosene was sold and the number of gallons sold to each.

An excise tax is a tax the federal government imposes on specific services or goods manufactured in or imported into the United States. Excise taxes are often included in the price of products such as gasoline or alcohol. NSKT Global specializes in helping businesses navigate complex tax requirements including Form 720 compliance.

This may influence which products we review and write about (and where those products appear on the site), but it in no way affects our recommendations or advice, which are grounded in thousands of hours of research. Our partners cannot pay us to guarantee favorable reviews of their products or services. With Taxfyle, your firm can access licensed CPAs and EAs who can prepare and review tax returns for your clients. Get $30 off your tax filing job today and access an affordable, licensed Tax Professional. With a more secure, easy-to-use platform and an average Pro experience of 12 years, there’s no beating Taxfyle.

Only one claim may be filed for any gallon of kerosene sold for use in noncommercial aviation. The federal government charges an excise tax on specific types of products and services, and, in some ways, it resembles a state sales tax. However, you may not be aware you’re paying this tax since it’s usually included in the price of goods, such as the gas you purchase for your vehicle.