Understanding the Due Date for Form 720 E-Filing
The Quarterly Federal Excise Tax Return, Form 720 is important to businesses that must report and pay their federal excise taxes. If you do not make these payments on time, you will be charged a penalty and an interest. In this article we are going to explain what happens if you miss the due date for form 720, help you understand how to e-file it and also give its deadline.
When is Form 720 Due?
Form 720 is filed quarterly; therefore, each quarter has its own filing deadline which must be fulfilled by the last day of the following month. These dates should be noted in your calendar so that you submit your return on time:
- Q1 (January - March): Due by April 30th
- Q2 (April - June): Due by July 31st
- Q3 (July - September): Due by October 31st
- Q4 (October - December): Due by January 31st of the following year
E-Filing Form 720: Steps and Benefits
Form 720 can as well be filed electronically through IRS’ e-filing system which comes with several advantages like increased pace in processing requests, reduced errors because of making submissions online as well as immediate confirmation of receipt from the authorities. Here’s how you can e-file Form 720:
- Choose Tax Software: Go for an IRS-approved tax filing service that supports filling out Form 720.
- Enter Required Information: Complete all necessary information regarding your excise taxes.
- Submit and Pay: After reviewing the form, submit it electronically and use Electronic Funds Transfer (EFT) to send your tax payment.
- Confirm Submission: Make sure that the IRS sends back confirmation showing they have received your form correctly.
Requesting an Extension for Form 720
The IRS does not usually extend the deadline for filing Form 720, unlike many other tax forms. Hence, it is essential to file and pay the owed excise taxes on time in order to avoid penalties. Nonetheless, if you anticipate that more time will be needed to complete your records then it would be wise to start preparing as early as possible so that you can submit on time.
Penalties and Interest for Late Filing and Payment
Failing to submit the form by the due date attracts penalties and interest charges. Here is what you need to know:
- Late Filing Penalties: The Internal Revenue Service (IRS) may impose a penalty if you do not file your returns when they are due; ordinarily this penalty is calculated as a percentage of the amount due which increases with each passing day.
- Late Payment Penalties: A penalty also applies in case payment of excise taxes does not accompany the return by its deadline. This is often expressed as a percentage of total unpaid tax liability.
- Interest on Late Payments: Alongside fines, the IRS adds interest upon any outstanding liability from the due date up until full settlement of such debts. The interest rate changes every quarter but is compounded daily.
Avoiding Penalties with Estimated Tax Payments
To stay away from penalties, one can make estimated payments every year towards taxation. This method works best when it is projected that a large sum of money will be owed in terms of excise tax at end-quarter. When these payments are made within specified time frames, one avoids underpayment levies being imposed together with accumulation of interests over time.
It is important to understand the deadlines and requirements for filing Form 720 electronically in order to stay compliant with IRS regulations. By filing timely and paying any taxes due, you can be penalised and the business will be on the right side of the law. Plan ahead, use trustworthy tax software and send estimated tax payments if possible so as not to incur late penalties.