Tax regulation is sometimes the most complex, especially regarding excise tax. One such tax can really make significant impacts on many businesses dealing with the fuel industry: the gasoline excise tax. As defined by the Internal Revenue Service, Form 720 is known as the Quarterly Federal Excise Tax Return, where it collects various forms of federal excise taxes, among which is the gasoline excise tax. Filing Form 720 online will save time and efforts of many businesses since it simplifies the process. The text outlined below runs through the gist of gasoline excise tax, Form 720, and its online filing requirements.
What is Gasoline Excise Tax?
A gasoline excise tax is a federal tax paid on gasoline sold and consumed in the United States. The primary purpose of the tax is to fund the highways, roads, and public transportations in the nation in such a way that they are well maintained and constructed appropriately. The federal tax on gasoline sold in the United States is 18.4 cents per gallon; however, this figure may vary with state taxes or specific fuel types.
Gasoline excise taxes primarily fall on the shoulders of fuel manufacturers, distributors, and some retailers, so it is very much important that these entities be informed of their filing obligations. The tax falls within the schedule of federal excise tax, including diesel, aviation fuel, and some alternative fuels.
Know Your Form 720 of the IRS
Form 720 is the official form of the IRS when collecting federal excise taxes. Except for gasoline, a wide variety of goods and services require this kind of tax payment. Businesses usually file this quarterly because they will be paying taxes for these services. The categories within this form are spread into multiple types of excise taxes, which include fuel, air transportation, communications, indoor tanning services, and so many others.
A gasoline excise tax, or in general terms, an environmental and fuel excise tax, is assessed on businesses that are required to complete specific segments of Form 720 pertaining to the business of fuel.
Form 720 Due Date
Form 720 is a quarterly filing with the IRS. The due dates are as follows:
- 1st Quarter: April 30
- 2nd Quarter: July 31
- 3rd Quarter: October 31
- 4th Quarter: January 31
Important filing date: Since late and defaulted payments carry penalty and interest charges, it is essential to file with in time to avoid these charges.
Benefits of E-Filing Form 720
Filing Form 720 electronically even has more appeal since it is so much easier to do. Due to the enhanced mechanization of e-filing means, all services for the electronic filing of this form offer several benefits:
- Time Savings: Filing e-forms is relatively a much shorter procedure than filling up by paper. No waiting for postal mail to get the correct form, to get accepted via mail or getting stuck in postal queues.
- Accuracy: Most online filing website contains built in checks to avoid errors. This minimizes the chances of a rejected return and subsequently amendments.
- Confirmation: One can get immediate confirmation when the IRS accepts and processes the return filed electronically.
- Record Keeping: Digital filing makes it easier to store and retrieve your records, therefore making it easier later on if the Tax Authority requires a review or audit.
How to e-File Form 720
e-File Form 720 is as easy as following some simple steps. Let’s take them one by one:
1. Select a Valid E-File Service Provider
The Internal Revenue Service also partners with other approved e-file providers that give you the chance to electronically submit Form 720. Of importance is that you need to pick one or more reputable and certified providers to ensure safety over your data and compliance with the IRS.
2. Gather Data
Gather all information before filing. You will need:
Your Employer Identification Number (EIN)
Details of taxable fuel sales, such as gallons sold
Calculations of amounts of excise taxes owed by fuel type and volume
3. E-file Form
Most e-file providers offer walk-through instructions, so you can make the necessary entries easily. The gasoline excise tax information goes in the correct spaces. Carefully read the instructions so you report the right numbers.
4. Check and File
Now, fill in all the provided information. Ensure everything is correct to avoid mistakes that might attract rejections or future penalties. Once you are satisfied that everything is accurate, you can submit the form electronically using your selected provider.
5. Make Payments
If there is a balance of excise taxes due, you can pay directly to the IRS from its online payment options. The IRS offers a variety of ways to do this, including direct debit, credit card, or electronic funds withdrawal. Make certain to pay on or before the filing deadline to avoid the accrual of late penalties.
6. Confirm
Once you have successfully e-filed, you will receive a confirmation or receipt from your e-file service provider. Be sure to retain this confirmation.
Common Errors to Be Tricky of
Filing the Form 720 on an online system makes the procedure much less complicated. However, there are few mistakes that can still be done here. Some are as follows:
- Incorrect Tax Computations: Be sure that your computation for the gasoline tax excise is correct. Minor errors may cause a difference and complications leading to penalties.
- Incorrect EIN Take an accurate Employer Identification Number. Inaccurate or mismatched EINs causes delays in processing.
- File Late: Not only penalties, but chances of audits also increase if a filing is late. Set reminders to file on time.
Online Gasoline Excise Tax Form 720 filing helps save time as it is extremely accurate and hassle-free. A fuel distributor or manufacturer who deals with gasoline excise tax should know the process and timing of filling out the tax form for gasoline to avoid fines.
Clear deadlines, easy e-filing options, and averting common mistakes have made it easier to take care of your excise tax responsibilities than ever. Hence, with these guidelines, you’ll be able to make sure that your Form 720 filing is accurate and on time, with more time devoted to growing the business instead of stressing over taxes.
Make your exercise tax filing process very simple today by getting ahead of the game and embracing ease as well as efficiency through online submission.