Publication 510 - Excise Taxes For 2005 - Department Of Treasury (Page 30 of 47) in pdf

How To Make Deposits

transportation taxes may be based on taxes

Amount of Deposits

included in amounts billed or tickets sold during

a semimonthly period instead of on taxes actu-

To avoid a penalty, make your deposits timely

Deposits for a semimonthly period generally

ally collected during the period. Under the alter-

and do not mail your deposits directly to the IRS.

must be at least 95 percent of the net tax liability

native method, the tax included in amounts

Records of your deposits will be sent to the IRS

for that period unless the safe harbor rule (dis-

billed or tickets sold during a semimonthly pe-

for crediting to your accounts.

cussed later) applies. Generally, you do not

riod is considered collected during the first 7

have to make a deposit for a period in which you

Electronic deposit requirement. You must

days of the second following semimonthly pe-

incurred no tax liability.

make electronic deposits of all depository taxes

riod. The deposit of tax is due by the 3rd banking

(such as deposits for employment tax, excise

day after the 7th day of that period.

Net tax liability. Your net tax liability is your

tax, and corporate income tax) using the Elec-

Example. The tax included in amounts

tax liability for the period minus any claims on

tronic Federal Tax Payment System (EFTPS) in

billed or tickets sold for the period June 16-30,

Schedule C (Form 720) for the period. You may

2005 if:

2005, is considered collected from July 16-22,

figure your net tax liability for a semimonthly

•

The total deposits of such taxes in 2003

2005, and must be deposited by July 27, 2005.

period by dividing your net liability incurred dur-

exceeded $200,000 or

To use the alternative method, you must

ing the calendar month by two. If you use this

•

You were required to use EFTPS in 2004.

keep a separate account of the tax included in

method, you must use it for all semimonthly

amounts billed or tickets sold during the month

periods in the calendar quarter.

If you are required to use EFTPS and use

and report on Form 720 the tax included in

Do not reduce your liability by any

Form 8109, Federal Tax Deposit Coupon, in-

amounts billed or tickets sold and not the

amounts from Form 720X.

stead, you may be subject to a 10% penalty. If

amount of tax that is actually collected. For ex-

CAUTION

you are not required to use EFTPS, you may

ample, amounts billed in December, January,

participate voluntarily. To get more information

and February are considered collected during

or to enroll in EFTPS, visit the EFTPS website at

January, February, and March and are reported

, or call 1-800-555-4477. Also

on Form 720 as the tax for the 1st quarter of the

Safe Harbor Rule

see Publication 966, Electronic Choices for Pay-

calendar year.

ing ALL Your Federal Taxes.

The separate account for any month cannot

The safe harbor rule applies separately to de-

Depositing on time. For EFTPS deposits to

include an adjustment resulting from a refusal to

posits under the regular method and the alterna-

be on time, you must initiate the transaction at

pay or inability to collect unless the refusal has

least one business day before the date the de-

tive method. Persons who filed Form 720 for the

been reported to the IRS. See Uncollected Tax

posit is due.

look-back quarter (the 2nd calendar quarter pre-

Report on page 5.

ceding the current quarter) are considered to

The net amount of tax that is considered

Federal Tax Deposit Coupons. If you are not

meet the semimonthly deposit requirement if the

collected during the semimonthly period must be

making deposits by EFTPS, use Form 8109 to

deposit for each semimonthly period in the cur-

either:

make the deposits at an authorized financial

rent quarter is at least

(16.67%) of the net tax

institution. See the instructions in the coupon

•

The net amount of tax reflected in the sep-

liability reported for the look-back quarter.

book for additional information. If you do not

arate account for the corresponding semi-

For the semimonthly period for which the

have a coupon book, call 1-800-829-4933.

monthly period of the preceding month or

additional deposit is required, the additional de-

You will automatically be enrolled in

•

One-half of the net amount of tax reflected

posit must be at least

(12.23%),

TIP

EFTPS when you apply for an EIN.

in the separate account for the preceding

(11.12%) for non-EFTPS, of the net tax liability

You will receive a separate mailing

month.

reported for the look-back quarter. Also, the total

containing instructions for activating your

deposit for that semimonthly period must be at

EFTPS enrollment after you receive your EIN.

least

(16.67%) of the net tax liability reported

Special rule for deposits of taxes in Septem-

You will still have the option to use FTD cou-

ber 2005. If you are required to make depos-

for the look-back quarter.

pons, but see Electronic deposit requirement

its, see the chart below. The special rule does

earlier.

Exceptions. The safe harbor rule does not

not apply to taxes not required to be deposited

apply to:

(see Payment of Taxes earlier). See Regula-

When To Make Deposits

•

tions section 40.6302(c)-2 for rules to figure the

The 1st and 2nd quarters beginning on or

net tax liability for the deposits due in Septem-

after the effective date of an increase in

There are two methods for determining depos-

ber.

the rate of tax unless the deposit of taxes

its: the regular method and the alternative

for each semimonthly period in the calen-

method.

Additional deposit of taxes in September

dar quarter is at least

(16.67%) of the

The regular method applies to all taxes in

2005

tax liability you would have had for the

Part I of Form 720 except for communications

look-back quarter if the increased rate of

and air transportation taxes if deposits are

For the Period

based on amounts billed or tickets sold, rather

tax had been in effect for that look-back

Beginning Ending Due

than on amounts actually collected. See Alterna-

quarter,

Type of Tax

Date

tive method below.

•

Any quarter if liability includes any tax not

Regular method

If you are depositing more than one tax

in effect throughout the look-back quarter,

taxes

under a method, combine all the taxes under the

EFTPS

Sept. 16

Sept.

method and make one deposit for the semi-

•

monthly period.

For deposits under the alternative method,

Non-EFTPS

Sept. 16

Sept.

any quarter if liability includes any tax not

Regular method. The deposit of tax for a

in effect throughout the look-back quarter

semimonthly period is due by the 14th day fol-

Alternative method

and the month preceding the look-back

lowing that period. Generally, this is the 29th day

taxes (IRS Nos. 22,

quarter.

of a month for the first semimonthly period and

26, 27, and 28)

the 14th day of the following month for the sec-

(based on amounts

ond semimonthly period. If the 14th or the 29th

Requirements to be met. For the safe harbor

billed)

day falls on a Saturday, Sunday, or legal holi-

rule to apply, you must:

EFTPS

Sept. 1

Sept.

day, you must make the deposit by the immedi-

•

Make each deposit timely at an authorized

ately preceding day that is not a Saturday,

Non-EFTPS

Sept. 1

Sept.

financial institution and

Sunday, or legal holiday.

•

Pay any underpayment for the current

Alternative method (IRS Nos. 22, 26, 27, and

See Electronic deposit requirement earlier.

28). Deposits of communications and air

quarter by the due date of the return.

Page 30

Publication 510 - Excise Taxes For 2005 - Department Of Treasury Page 30

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