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IRS Form 720 Instructions: What Employers Should Know

IRS Form 720 Instructions: What Employers Should Know 2025

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The document is the Quarterly Federal Excise Tax Return (Form 720) for the Department of the Treasury, Internal Revenue Service. It outlines various excise taxes applicable to environmental, fuel, and other specific goods and services. The form includes sections for reporting tax liabilities, claims, and payment details for different categories such as petroleum products, chemicals, transportation services, and more. It also provides instructions for completing the form and submitting payments.

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What are the tax obligations of employers?

Employers generally must withhold Social Security and Medicare taxes from employees wages and pay the employer share of these taxes. Social security and Medicare taxes have different rates and only the Social Security tax has a wage base limit. The wage base limit is the maximum wage subject to the tax for the year.

What are the requirements for filing form 720?

Any entity, whether a sole proprietorship, partnership, corporation, or a limited liability company, dealing in goods or services subject to federal excise taxes must file Form 720. This includes businesses involved in the sale of luxury goods, certain types of equipment, or specific services.

How do you know if your business needs to file form 720?

You should file Form 720 if you collect any excise tax during the current quarter. If you were responsible for collecting excise taxes during any quarter during the year and you have not filed a final excise tax return, you should file Form 720.

What is the requirement to work for IRS?

These employment requirements include: U.S. citizenship and age verification. Successfully passing a federal background investigation (if required) Successfully pass a fingerprint check and a tax compliance check of prior years.

Do employers report to IRS?

Generally, employers must report wages, tips and other compensation paid to an employee by filing the required form(s) to the IRS. You must also report taxes you deposit by filing Forms 941, 943, 944, 945, and 940 on paper or through e-file.

What do I need from my employer to do my taxes?

Forms W-2, 1099 or other information returns People or organizations that paid you during the year are required to report the payments to the IRS on an information return. They must file these forms with the IRS and send a copy to you. You should get them electronically or by mail in January or February.

What businesses are subject to excise tax?

Federal excise tax is usually imposed on the sale of things like fuel, airline tickets, heavy trucks and highway tractors, indoor tanning, tires, tobacco and other goods and services.

What does the IRS require employers to do?

Employers must deposit and report federal employment taxes. Some of these taxes are paid by both the employer and the employee, while others are paid by the employer. Examples include federal income tax, Social Security tax, Medicare tax and federal unemployment tax.

IRS Form 720 Instructions: What Employers Should Know 2025

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