Even if you’re focused on other tasks, you are not going to avoid filing excise tax returns. Making massive movements towards modernization of taxation with each year makes the electronic submission of excise taxes more appealing to taxpayers considering that filing of returns can now be made easier. In this how-to guide, we cover how to e-file excise tax returns step by step with details for a novice starting with a basic definition of excise Taxes, and moving to the advantages of e-filing and how one needs to proceed to do that. Whether you are new to filing returns or are often taking time to file your taxes, this guide is designed to help you better the process.
What Are Excise Taxes?
Excise taxes are a kind of taxation on the goods, products, services, and activities. With regards to the persons, breeds of taxation called excise taxes do not fall under income tax which is induced on a person’s earnings, excise taxes are imposed on substance fuels, cigarettes, alcohol, air travel, some types of equipment and services. These taxes can be generalized as federal excise taxes or state and local excise taxes or both. The collection of these taxes is mandatory in goods and services regarding manufactures or sales of goods within the taxation scheme for business enterprises.
Say you are in a business selling gasoline, you are expected to charge the consumers excise tax and pay that amount to the government. Companies that produce cigars or alcohol drinks for sale also charge and pay an excise tax on the commodity. In some instances, businesses that involve air transport or the use of specific motor vehicles for business may even be charged excise tax depending on the activities involved.
Why E-File Your Excise Tax Returns?
Businesses can now e-file excise tax returns across various categories. Here’s why:
Speed and Efficiency: E-filing is a more rapid method when compared to conventional paper filing to submit your tax returns. There is no need for you to wait extended periods for your tax return to be submitted because with e-filing the tax return can be submitted within seconds through clicking the buttons on the computer, and the system goes to work processing the return with the least lag.
Accuracy: When submitting the returns through e-filing, they may be electronic means through which the platform lends you to fill in order to avoid mistakes or the risk of leaving some fields empty. In this case, this minimizes the chances of your return being sent back as a result of simple errors or information being incomplete, making it convenient for users.
Instant Confirmation: The moment you e-file, you get an email confirmation that your return has been submitted and accepted by the IRS or any other relevant authority. This removes the anxiety of whether your paper return was successfully received and processed.
Economical: It is common knowledge that e-filing a tax return is cheaper compared to engaging the services of a tax preparer in his office or mailing copies of tax forms. There are several platforms available online specifically for e-filing with low charges, especially for businesses filing simple returns helping you to cut down on costs of tax preparation.
Flexible: All that is needed is an internet connection in order to e-file the excise tax return. This is very convenient in ensuring that one does not miss a filing date resulting in incurring penalties.
How to Get Started with E-Filing Excise Taxes
At a glance, it might not be difficult to e-file, though it may look daunting at the beginning. It is a matter of understanding what you need to do. Read on to see how:
- Determine Which Forms You Need to File
The first step is identifying which excise tax forms you need to file. The most common form calculating Federal Excise Taxes is the IRS Form 720, which incorporates several types of excise taxes including but not limited to Air Transportation tax and Indoor Tanning Services tax as well as products like fuel. Nonetheless, other forms may be necessary depending on the specific activities of your company, such as:
Form 2290: For vehicles with a gross weight of 55000 lbs or heavier Heavy Vehicle Use Tax.
Form 8849: Excise Tax Refund Application.
Form 730: For Tax on Gambling.
Form 11-C: Tax on Associate of Wager and Registration Form.
In any case, each form has also to deal with particular excise taxes, and that is why it is important to go through the details of each for the right one.
- Select an IRS e-file Provider
After figuring out the correct form(s) that you will probably choose an e-file provider that is authorized by the IRS. These platforms are such specifically for submission of excise tax returns for the businesses and individuals electronically. Most of them provide easy to use interfaces, automated checks and filing support.
Make sure to check the pricing and other information of the e-file target at necessary assessment. These e-filing sites allow creation of accounts, fulfil the requirements and e-file with no time.
- Collect Your Finances and Necessary Tax Materials
It is essential that you have all the necessary information and tax documents before you start e-filing for the excise tax. Some of these records may include documents on sales or transportation or manufacturing services of the taxable products or relevant services to the business. Also, your whole business’s EIN will also be important because it is required when you will be returning the fliers.
Go over the directions and qualifying guidelines for the form that has been prepared for submission to make certain that the information that is needed such as the tax rates, details of quantities sold or the refund and credit amounts claimed is sufficient.
- Prepare and Submit Your Return Online
With the knowledge you have on financial and the provider of your choice, you can now proceed in filling out the excise tax return. Take as much time as necessary in the provision of information and ensure that it is correct at all times. It is important to note that most of the e-file platforms will carry out such checks automatically guaranteeing the minimization of rejections or addressing matters relating to audits.
When the form is filled in, a thorough analysis of the document is required before any submission is made. Once the tax return has been filed, a notification confirming receipts of the filing is received from the Internal Revenue Services.
- Make Payment Of Levied Tax As Necessary
In case this assessment results in an excise tax return filed with excess or owing taxes, the tax payment must be made via the electronic means only. E-filing systems usually offer such tax payment strategies for instance withdrawal from a savings account, credit, debt card or tax payment electronically, magnificently known as the E-federal tax payment system (EFTPS).
In the case of any such taxes borrowed to file returns, recommend that payment be made before such filing to evade penalties or costs.
Common Errors and Misconceptions When Filling Taxes via E-filing
Although e-filing makes it easy to file the excise taxes returns, there are a few mistakes you ought to avoid as offered bankruptcy games for cc debts:
Incorret or Missing EIN: Ensure that your Employer Identification Number is captured accurately. This may lead to rejected returns outcomes if your EIN is wrong.
Filing Wrong Form: Make sure that you are filing the excise tax correct form flattering your business type and activities.
Frozen in regard to Excise Tax deadlines: All Excise Tax Returns have filing deadlines. Other than these, failing to make timely payment can also attract penalty/interest tax.
Not Paying the Tax: In cases where one’s tax return shows tax amounts payable, e.g. Form 1040, one should try and clear this debt in the earliest instance so as to prevent incurring charges.
E-filing of these excise tax returns saves time and costs, and provides a very secure means to those customers with tax obligations. This requires knowledge on which recommendation to file, selecting a reputable e-file service, and getting the relevant information before beginning the return process to make it easier. Whether you’re filing taxes for the first time and trying to convert from paper to electronic filing or you’re in the latter category, this guide is good for you. It will expose you to the filing process without fear of making errors with IRS compliance.