If your business requires you to file a federal tax return typically, you must file it using IRS Form 720, also called the quarterly Federal Excise Tax Return. This form is utilized for different excise taxes such as environmental tax, fuel tax, air transportation tax, the tax on indoor tanning, communications tax, as well as other taxes that are imposed by the federal government.
One of the most frequent questions business owners have is:
Do I need to submit Form 720 online or send it by paper?
Both are acceptable, both options are allowed, but neither provide the same level of service. Paper filing might be familiar, but it could be more difficult to follow. Online filing tends to be quicker, simpler to handle and can help reduce the number of common errors made in filing.
In this blog we’ll discuss the advantages and disadvantages of paper and online filing in a straightforward manner to help you choose the best method for your company.
What is the Form 720 Excise Tax?
Form 720 is used by businesses to report and pay certain federal excise taxes to the IRS. These taxes apply to specific goods, services, or business activities.
Certain businesses might need to submit Form 720 for:
- Excise tax on fuel-related products
- Taxes on environmental excise
- Taxes for air transport
- Indoor tanning tax
- Communication taxes
- Taxes on manufacturer and retail excise
- PCORI fee report If appropriate
Because Form 720 is generally completed quarterly, businesses need to be aware of the deadline for filing and ensure that the correct tax details are filed.
What Is Paper Filing for Form 720?
Paper filing involves filling in Form 720 manually, printing the form, then mailing it off to the IRS. This is the standard method to file, however certain businesses still use this method due to the fact that they are accustomed to dealing with tax forms in paper.
For paper filing it is necessary to fill in the tax information, verify the tax calculations and attach any necessary schedules, and then mail it all to the right IRS address.
Pros of Paper Filing
Paper filing can be a good option for companies that are familiar with tax filing manuals. Some individuals prefer to look over the printed version before submitting it. This is also not required for an online filing.
For filings that are very basic companies may find that filing on paper is sufficient. It could also be helpful to those who aren’t confident using digital platforms.
Cons of Paper Filing
The primary issue with filing on paper is that it requires longer. It is necessary to fill out the forms, create the documents and then send them to the IRS. Following that, you will need to be patient for the IRS to process and receive the tax return.
There is no immediate confirmation. If the form is not received on time or not received, or filled out incorrectly the form may not be recognized immediately.
Paper filing may cause mistakes made by hand. A tiny error in tax calculation or address, tax category or payment information could cause delays or even confusion.
What is Online Filing? Form 720?
Online filing is the process of filing Form 720 electronically through an approved online filing service. Instead of mailing and printing the form, fill in the information online and then submit the return electronically.
When filing online, the process is typically more streamlined. You can input the tax information, examine the information and submit the tax return and then receive an acknowledgement upon filing.
For business owners who are busy it will simplify Form 720 filing much easier to manage.
Online Filing
Online filing is generally more efficient as paper-based filing. There is no need to rely on postage, printing or the timing of mailing.
It also allows for an improved tracking. After the return has been submitted you can get confirmation of receipt and save a digital document for future reference.
Another advantage is the accuracy. Online filing platforms usually help you with the procedure, which can help you avoid the chances of making mistakes. This is important since Form 720 can include different tax classifications, and selecting the right section is important.
Online filing is also beneficial for companies that need to submit Form 720 every quarter. It helps keep things organized and reduces time spent having to file the paper form every time.
Cons of Online Filing
Online filing may involve a service fee, depending on the platform you use. It also requires basic internet access and some comfort with using an online system.
For businesses that are not used to digital filing, the first time may feel slightly new. But once the process is understood, many businesses find online filing easier than paper filing.
Best for businesses that want speed and greater tracking. filers that are comfortable with paper
Online vs Paper Filing: Quick Comparison
| Feature | Online Filing | Paper Filing |
| Filing method | Submitted electronically | Printed and mailed |
| Processing speed | Faster | Slower |
| IRS acknowledgement | Available after submission | No instant confirmation |
| Error control | Guided entry may reduce mistakes | Higher chance of manual errors |
| Recordkeeping | Digital records | Physical copies |
| Convenience | File from anywhere | Requires printing and mailing |
| Best for | Businesses wanting speed and accuracy | Traditional manual filers |
With Simple720Tax, you can:
- File Form 720 online
- Choose the applicable excise tax category
- Reduce manual paperwork
- Avoid common filing mistakes
- Keep better digital records
- Manage quarterly filing more easily
- Submit your return in a simple and organised way
If your company needs to file a tax return for the tax on fuel, environmental taxes and indoor tanning tax PCORI cost, PCORI fee or any other relevant Form 720 excise tax, Simple720Tax will make the process easier.
Final Thoughts
Form 720 is an essential aspect of excise tax compliance . Selecting the correct filing method will make a huge difference in how easy or stressful the process is.
Paper filing is a feasible alternative, however it can be slow and hard to track. Online filing tends to be faster, easier and more convenient for companies who want to stay organized.
If you’re trying to speed up your time and get rid of unnecessary paper work, online filing is a great solution.
Fill out Your Form 720 Excise Tax online using the Simple720Tax software and help make the filing of quarterly excise tax easier for your business.