Filing taxes is one of the most complicated and time-consuming practices companies engage in, especially those that require submitting a Form 720, which is the Quarterly Federal Excise Tax Return. The form is a combination of various excise taxes paid by anything from fuel usage to air transportation or even products such as alcohol and tobacco products. While many businesses traditionally filed on paper, the IRS has made great strides to encourage e-filing of Form 720. Not only will this be less time-consuming for your business, but it also saves it more than you might initially think. In the following article, we will discuss how you can make filing Form 720 electronically streamline your tax process and improve your bottom line.
What is Form 720?
Business Report Pay Form 720 Form 720 is the report a business files to report the payment of excise taxes. Some examples of excise taxes are taxes on goods and services such as gasoline, air transport, and even the manufacture of products like trucks, tires, and vaccines. Form 720 must be filed quarterly; in other words, businesses must submit their quarterly returns within the established timeframe so as to avoid extra interest and penalties.
With a quarterly schedule and particularly because the excise tax regulations get very involved, manual filing of Form 720 can get pretty heavy. Nevertheless, switching to electronic filing provides several benefits that can help reduce the hassle of this and make it even more efficient.
Benefits of Filing Form 720 Electronically
- Speed and Efficiency
The primary advantage with respect to e-filing is the time it takes to complete and submit your Form 720. For example, filing by paper usually involves printing forms, re-verifying all details by hand, and mailing a paper document to the IRS. The processes are extremely time-consuming and sometimes end in long delays when processing them, especially during peak tax seasons.
This process becomes streamlined since you fill out and forward Form 720 using an approved e-file service provider. Your return may now be processed by the IRS almost immediately after submission; hence, any refund or confirmation should arrive at your doorstep quicker.
- Less Error and Accuracy
Tax forms are a cumbersome activity and one is sure to make errors when doing it by hand. For example, there is a lot of chance of either miscalculation, incomplete fields, or even the wrong tax rates among others, hence causing delay, penalty, or audit. Those systems at times have an automated error checking mechanism directly highlighting missing or incorrect information before submitting.
These automatically work out tax amounts based on the data you input, thus decreasing human error and ensuring greater precision. Additionally, you will sleep better at night knowing your filing is compliant with current IRS regulations.
- Cost Savings
Time and money are the two closest things in the business world. Filing Form 720 electronically saves time and thus, saves a lot of money in several ways. For one thing, they save paper, printing, and mailing costs, so in a business that files its returns multiple times per year, these costs quickly mount up. Everything is done digitally, so no paper is used.
Another advantage of e-filing is its lower chance for costly errors and penalties. By the automation and checking for errors tools of an e-filing service, the collection of fines for submissions that are late or incorrect can be avoided. Moreover, quicker processing also leads to quicker refunds for businesses, thus contributing to increased cash flow.
Most e-file vendors have cost-effective filing solutions for businesses of all sizes, so you can be certain that filling your taxes without going over budget while still doing it right.
- Streamlined Record-Keeping
It also makes record-keeping more efficient. In manual filing, you need to keep the hard copies of your Form 720, as well as other supporting papers. This can make it messy and easy to lose some records after several years. E-filing saves you all that because it automatically saves a digital version of your submission and related documents.
Over a dozen providers allow you to access your secure online account, where you can easily see and print your past filings. This makes it easier to look at how your taxes have changed over the years and help plan for the future. In case of an audit, you will also save valuable time and resources with records right at your fingertips.
- Environmental Impact
E-filing is also a green option. You are saving paper, ink, and fuel used to deliver mail by submitting your taxes electronically. In this day in age, when companies are aggressively embracing the green trend, it is easy to flip to e-filing and start making a difference in the more environmentally friendly ways.
- More Secure
The security of information involved is the main concern for any business when filing taxes. Information that will contain extra sensitive financial data may be at risk if not well protected. E-filing security measures are better than paper filing methods. Tax returns sent through mail may be delayed or lost, and someone else may end up accessing them unknowingly. E-filing, on the other hand, encrypts your data as it is transferred to the IRS.
Some e-filing systems, beyond encryption, will also have login credentials and multifactor authentication to ensure that only the authorized people can access and submit your tax forms. The IRS also confirms receipt in a timely fashion when you file electronically, reducing the risk of any filings becoming lost and giving the peace of mind that your return was submitted safely.
How to E-File Form 720
This is actually a pretty straightforward process to e-file Form 720; you only need to follow these simple steps:
- Choose an IRS-Approved E-File Provider: You can use Form 14133 to locate an IRS-approved software provider or service that will e-file your Form 720 for you. Most providers specialize only in excise tax filing, making it easier to file.
- Register an Account: Once you’ve chosen your provider, sign up for an account and go through the registration process by filling in your business information, excise tax information and all the other information.
3.Form 720 Filing: Just provide details of the excise taxes your business is liable for reporting. All e-file providers will auto-calculate the amounts for you, meaning that you’ll save time and avoid error chances.
- Review and Transmit: Verify your form for accuracy, and then you can file it electronically with the IRS. An acknowledgement from the IRS of receiving your return normally comes back within 24 to 48 hours. You will also receive a confirmation of your submission.
- Make Tax Payments: If you need to pay tax, you can do this online via the e-file system. This obviates the use of checks and money orders and speeds up processing.
The e-filing of Form 720 is a means of saving both time and money for the business while ensuring a secure way of making such regular submissions over excise taxes. It simplifies the filing process, minimizes the chances of error, and thereby saves money in penalties for errors and delays in filing. Digital record-keeping and improved security make this option in the management of one’s quarterly federal excise tax returns. If you haven’t transitioned yet, now’s the time to join the convenience and savings of filing electronically.