Info for businesses filing excise taxes

Businesses providing goods and services that are subject to excise tax must file a Form 720 quarterly to report the tax to the IRS.

What is excise tax?
Excise taxes are charged on a wide variety of goods, services and activities. The tax may be imposed at the time of:

  • Import
  • Sale by the manufacturer
  • Sale by the retailer
  • Use by the consumer

Many excise taxes go into trust funds earmarked for related capital projects, such as highway and airport improvements. Excise taxes are independent of income taxes. People pay excise taxes on things like gasoline, indoor tanning, airline tickets and tires.

Since the excise cost is usually included in the price, the seller or manufacturer is responsible for sending these tax payments to the IRS and filing Form 720.

When to file?
Businesses must file the form for each quarter of the calendar year. Here are the due dates:

  • Quarter 1 – January, February, March: Deadline = April 30
  • Quarter 2 – April, May, June: Deadline = July 31
  • Quarter 3 – July, August, September: Deadline = October 31
  • Quarter 4 – October, November, December: Deadline = January 31

If the due date for filing a return falls on a Saturday, Sunday or legal holiday, the due date is the next business day.

How to file?
While the IRS still accepts paper Forms 720, they encourage businesses to file electronically. To help excise taxpayers do this, the IRS posts the contact information on IRS.gov of all approved e-file transmitters for excise forms. Businesses can submit forms online 24 hours a day.

That said, not all excise forms can be filed electronically. Those that are available for electronic filing are:

  • Form 720, Quarterly Federal Excise Tax.
  • Form 2290, Heavy Highway Vehicle Use Tax.
  • Form 8849, Claim for Refund of Excise Taxes, Schedules 1, 2, 3, 5, 6 and 8.

When businesses file Form 720 electronically, they not only get confirmation the IRS received the form, but it reduces processing time and errors. To electronically file Form 720, business taxpayers will have to pay the provider’s fee for online submission.

More information:
Form 720 e-file providers page
2290 Modernized e-file Providers
8849 Modernized e-file Providers
Excise Tax Forms and Publication

IRS recommends business owners e-file payroll tax returns

With the Oct. 31 quarterly payroll tax return due date just around the corner, the Internal Revenue Service today urged business owners to take advantage of the speed and convenience of filing these returns electronically.

IRS Forms 940, 941, 943, 944 or 945 are used to report employment tax information. The IRS recommends electronic filing, or e-filing, of these returns.

E-filing saves taxpayers time by performing calculations and populating forms and schedules using a step-by-step interview process. Once submitted, the information is quickly available to the IRS thus reducing processing time.

E-filing is the most accurate method to file returns. Those who e-file receive missing information alerts. Electronically filed returns have fewer errors, which reduces a taxpayer’s chance of receiving an IRS notice.

The IRS takes safeguarding personal information seriously and e-filing security is a top priority at the agency. E-file security standards ensure tax information is protected from security breaches. The IRS requires all authorized IRS e-file providers to ensure only authorized users have access to secure information.

The IRS acknowledges receipt of e-filed returns within 24 hours. The agency retains the information on the tax return, making it accessible to the filer or tax professional around the clock. Unlike filing a return on paper, e-filing assures the filer that the tax return is with the IRS and not misplaced or lost in the mail.

There are two options for electronically filing payroll tax returns:

  • Self-file
    • Businesses purchase IRS-approved software. A list of providers offers options based on the relevant tax year.
    • Business owners may need to pay a fee to electronically file their returns.
    • The tax software requires a signature. The taxpayer has the option to apply for an online signature PIN or to scan and attach Form 8453-EMP, Employment Tax Declaration for an IRS e-file Return.
  • Have a tax professional file on behalf of the business

Only the business owner can apply for an online signature PIN. Third parties, such as attorneys, CPAs, tax return preparers or other tax professionals can’t request a PIN on behalf of the business, nor can they use the PIN to sign returns on behalf of their clients.

For more information on electronic filing of payroll tax returns, see the E-File Employment Tax Forms Page.

Taxpayers can explore several tax help options before visiting an IRS office

Some taxpayers may think they need to visit an IRS office for help in person with their tax issues. However, many of these people may actually find what they need online or by phone. In fact, many questions can be answered without ever having to visit to an IRS Taxpayer Assistance Center.

Finding answers to their tax questions.
Taxpayers can use several resources to find answers:

Checking on their tax refund status.
Taxpayers have two options to check on their refund:

Making a payment.
Taxpayers have several options for submitting a payment to IRS:

Viewing online accounts.
Taxpayers can view account information online at IRS.gov/account. From this page, taxpayers can:

  • View the amount they owe and get the total payoff amount for the current calendar day.
  • Connect to other online tools, such as Direct Pay and Get Transcript, without having to log in again.
  • Get key information about their current year tax return as it was originally filed.

Visiting an IRS office.
If a taxpayer decides they want a face-to-face interaction, they need to first take these two steps:

  • Use the Contact Your Local Office tool on IRS.gov. This tool helps taxpayers find the closest IRS Taxpayer Assistance Center, the days and hours of operation, and a list of services the TAC provides.
  • Make an appointment. The taxpayer will need to call 844-545-5640 to make an appointment. Taxpayers will then receive an email confirming the day and time of their appointment.

Reminder: Oct. 15 deadline approaching for taxpayers who requested extensions

Taxpayers who requested the six-month filing extension should complete their tax returns and file on or before the Oct. 15 deadline. Convenient electronic filing options, including IRS  Free File, are still available.

Filing electronically is easy, safe and the most accurate way to file taxes. There are a variety of electronic filing options. Those options include having tax returns prepared at a Volunteer Income Tax Assistance or Tax Counseling for the Elderly site, purchasing commercial software or choosing a reputable tax professional who is also an authorized e-file provider.

About 15 million taxpayers filed for an extension this year. Although Oct. 15 is the last day for most people to file, some may have more time. They include:

  • Members of the military and others serving in a combat zone. They typically have 180 days after they leave the combat zone to file returns and pay any taxes due.
  • Taxpayers in federally-declared disaster areas who already had valid extensions. For details, see the disaster relief page on IRS.gov.

Extension filers can file when they are ready and don’t have to wait until Oct. 15 to file. Taxpayers who did not request an extension and have yet to file a 2018 tax return can generally avoid additional penalties and interest by filing the return as soon as possible and paying any taxes owed.

New Form 1040
Form 1040 has been redesigned for tax year 2018. The revised form consolidates Forms 1040, 1040A and 1040-EZ into one form that all individual taxpayers will use to file their 2018 federal income tax return.

The new form uses a “building block” approach that can be supplemented with additional schedules as needed. Taxpayers with straightforward tax situations will only need to file the Form 1040 with no additional schedules. People who use tax software will still follow the steps they’re familiar with from previous years. Since nearly 90 percent of taxpayers now use tax software, the IRS expects the change to Form 1040 and its schedules to be seamless for those who file electronically.

Recordkeeping and adjusted gross income
As a reminder, taxpayers should keep a copy of their tax returns and supporting documents for a minimum of three years. Some taxpayers using a tax-filing software product for the first time may need their adjusted gross income amount from their prior-year tax return to verify their identity.

Taxpayers using the same tax software they used last year will not need to enter their prior year information to electronically sign their 2018 tax return. Taxpayers can learn more about how to verify their identity and electronically sign tax returns at Validating Your Electronically Filed Tax Return.

Payment options
IRS Direct Pay offers taxpayers a fast way to pay what they owe. Direct Pay is free and allows individuals to securely pay their tax bills or make quarterly estimated tax payments online directly from checking or savings accounts without any fees or pre-registration.

Taxpayers can also pay by debit or credit card. While the IRS does not charge a fee for this service, the payment processer does. Other payment options include the Electronic Federal Tax Payment System (enrollment is required) and electronic funds withdrawal which is available when e-filing. Taxpayers can also pay what they owe using the IRS2Go mobile app. Those choosing to pay by check or money order should make the payment out to the “United States Treasury.”

Eligible taxpayers can set up an online payment agreement in a matter of minutes to pay tax, interest and penalties they may owe. There is no application fee to setup payment plans lasting 120 days or less. In 2019, over 1 million agreements were set up by taxpayers online.

Individual taxpayers can go to IRS.gov/account and login to view their balance, payment history, pay their taxes and access tax records through Get Transcript. Before setting up an account, taxpayers should review Secure Access: How to Register for Certain Online Self-Help Tools to make sure they have the information needed to verify their identities.

Prepare for next year − Do a ‘Paycheck Checkup’ now
The IRS also urges extension filers to do a “Paycheck Checkup” now. It helps make sure the right amount is being withheld from their checks following tax reform. If a change is needed, there’s still time to adjust withholding during the last quarter of the year.

Taxpayers can use the Tax Withholding Estimator to approximate their 2019 income taxes and proper withholding. The tool compares the estimate to current withholding to help taxpayers decide if they want to change that amount with their employer. Taxpayers should have their 2018 tax return available when using the tool to estimate income, deductions, adjustments and credits for 2019. They will also need their most recent pay stub to compute the amount of withholding so far this year.

With major changes made by the Tax Cuts and Jobs Act, the IRS encourages taxpayers seeking more information on tax reform to review Publication 5307, Tax Reform: Basics for Individuals and Families, and Publication 5318, Tax Reform What’s New for Your Business. For other tips and resources, visit IRS.gov/taxreform. The IRS reminds taxpayers they have a variety of options to get help filing and preparing their tax returns on IRS.gov, the official IRS website. Taxpayers can find answers to their tax questions and resolve tax issues online. The Let Us Help You page helps answer most tax questions, and the IRS Services Guide links to these and other IRS services.