Avoid These 7 Common Tanning Tax Filing Mistakes
Since the first quarter filing period has commenced and we get closer to the filing deadline for excise tax returns, it is essential that the business owner files their tanning excise tax on time with Form 720 to avoid any problems. This blog post will cover some of the common mistakes made by tanning tax return filers and what can be done to prevent them.
Failure to Account for Cash and Online Transactions
Many tanning salon owners deal with both cash payments and online transactions. However, some may forget to properly account for both types of transactions. When both types of transactions are kept separately, there is always a chance of overlooking either one of them, which will result in erroneous recording of the total income for taxation purposes.
It is important to maintain proper records of all your business transactions so that you know exactly how much to pay in taxes.
Understanding Taxable Tanning Services in Salon Packages
While many salons offer tanning services as part of a package deal, they often fail to separate the tanning service from the rest of the package when filing their taxes. It’s critical to clearly segregate the tanning service amount and pay the 10% excise tax for that service alone.
Any other services included in the package may not be taxable, so ensure you are only taxing the tanning portion of the package.
Not Staying Updated with Current Tax Rates and Rules
The tax rate and laws vary frequently, and it is essential to stay updated regarding the latest tax law from the IRS website. The tax rates for tanning business and filing requirements have been amended from time to time, and it is necessary to ensure that the most updated information about tax rates is used during filing in order to avoid any unnecessary penalties.
Not Understanding Exemption Eligibility
The most difficult part of being a salon owner is figuring out what services should be taxed and which ones should not. It is necessary to understand the conditions under which tanning tax would be required.
There are IRS guidelines that clearly outline the services that should be subjected to taxation and those that should not be. For additional details, refer to IRS Excise Tax Indoor Tanning Services
Filing for Multiple Salons as One Business
Business owners usually operate more than one tanning facility; however, they erroneously attempt to make one excise tax payment for all the facilities that they operate. This is not accurate. Business owners are supposed to fill out one form 720 tax return for each tanning facility that they operate since merging the two processes may lead to errors or delays.
Missing the Filing Deadline and Incorrect Key Information
Remember to adhere strictly to the IRS deadlines, and verify that all the business data provided is correct, including the Employer Identification Number (EIN) and the business address.
Failure to adhere to the deadline will incur 720 penalties, and even providing erroneous data will delay the process. In filling the tanning excise tax, ensure that you use the right tax number, which in this case is IRS Num - 140 (Indoor Tanning Services).
Failure to Correct Incorrect Filings Promptly
Should there be an issue where there has been a mistake on your filing, whether it is related to the incorrect tax amounts or other information, it is essential to rectify the mistake promptly. This will help you avoid any additional taxes due to such delays. This amendment can be done by submitting Form 720-X.
Read our blog on Is the tanning excise tax still in effect to clear all your doubts.
Quick Tips to Avoid Mistakes
Go for Online Filing: In order to avoid most of the errors discussed above, you can go for online filing as opposed to manual filing. According to the IRS, online filing is much more accurate than manual filing.
Conclusion
To sum up, filing your tanning excise tax correctly and promptly is crucial to prevent any errors that may cost you money. To file your taxes correctly, you need to be up to date with the latest rate, determine whether you are eligible for an exemption, and file separately for each tanning salon.
In 2026, File your Salon’s Tanning Excise Tax Online with QuickFile720 for a seamless and error-free experience!