Form 720 Instruction 2025

Form 720 is one of the tax forms that is used by businesses that are selling services or goods that are subject to the excise tax. You need to file it with the IRS quarterly to pay your federal excise tax. Here is detailed information on how to fill out Form 720.

Gathering the Accounting Documents and Filling the Form

You need to get your accounting report to calculate your excise tax, which you are going to report on Form 720. In the first part, you will be providing your business information, such as your EIN, address, etc.

Part I: Calculating the Excise Taxes to Fill the Form

In general, the excise tax will correspond to the percentage of your sales. In part I, you will find the categories for excise tax, and you need to fill them out appropriately depending on the goods and services offered by your business.

Schedule A – Calculating the Net Tax Liabilities

In this part, you need to report the net tax liability of your business. Depending on your business, you can skip this part of the previous one.

Part II: Calculating the Appropriate Taxes

This part is only for businesses that offer goods and services, such as biodiesel sold as fuel, waterway fuel, indoor tanning services, bows and arrows, electric outboard motors, fishing equipment, or health insurance policies.

Fill Out Schedule T or Schedule C

Again, depending on the nature of your business, you will need to fill one or both of these parts. You can find detailed information on each section to learn which one you need to fill out.

Part III: Calculating the Total Tax

In this part, you are going to calculate your total tax from Parts I and II and other sections such as Schedule C. Later on, you need to fill in the boxes available on this part. You will also choose what to do with your overpayments in this part as well.

As you can see, filling out form 720 is quite straightforward. All you need to do is make sure that you provide accurate information to avoid any delays or rejections. Keep in mind that you can pay your balance in many ways. However, if you want your file to be concluded quickly, we recommend filing it electronically, where you can only pay your balance with a direct debit card.