File your Foreign Insurance Excise Tax
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What is Foreign Insurance Excise Tax?
The Foreign Insurance Excise Tax comes under Section 4371 applies to premiums paid on insurance, annuity, and reinsurance policies issued by foreign insurers for U.S. risks. It's levied to ensure parity between foreign and domestic insurance providers.
The tax rates vary by policy type: 4% (4¢ per dollar) on casualty insurance and indemnity bonds, and 1% (1¢ per dollar) on life, sickness, accident insurance, annuity contracts, and reinsurance premiums.
Under I.R.C. § 4374 the tax may be imposed on any of the following persons:
- The insured, sometimes referred to as the beneficiary,
- The policyholder, if that person is someone other than the insured,
- The insurance company, or
- The broker obtained the insurance.
Foreign Insurance Excise Tax Filing Requirements
| Category | Details |
|---|---|
| IRS Number | 30 (Foreign Insurance Taxes – Policies issued by foreign insurers) |
| Reporting Section | Part 1 |
| Filing Frequency | Quarterly |
| Tax Rate | 4% for Casualty insurance and indemnity bonds 1% for Life insurance, sickness and accident policies, and annuity contracts and Reinsurance |
| Tax Calculation Formula | Casualty insurance and indemnity bonds = Premiums Paid × 4% Life insurance, sickness and accident policies, and annuity contracts and Reinsurance = Premiums Paid × 1% |
| Details Required for Calculating the Tax Amount | Premium amount paid |
Foreign Insurance Excise Tax Due Dates and Penalties
| Quarter | Tax Period Covered | Form 720 Due Date |
|---|---|---|
| Q1 | January 1 – March 31 | April 30 |
| Q2 | April 1 – June 30 | July 31 |
| Q3 | July 1 – September 30 | October 31 |
| Q4 | October 1 – December 31 | January 31 (following year) |
If you fail to file Form 720 for your Foreign Insurance Excise Tax by the applicable due date, the IRS may impose penalties and interest. Common penalties include:
Generally 5% of the unpaid tax for each month or part of a month the return is late, up to 25%.
Generally 0.5% of the unpaid tax for each month or part of a month, up to 25%.
Interest may accrue on unpaid taxes from the applicable due date until the balance is paid.
Additional penalties may apply when required federal tax deposits are late, insufficient, or not made using the required method.
How to file Foreign Insurance Excise Tax online with Simple720?
(easy 4 Steps)
details
the Tax category
Tax details
your payment
Why Choose Simple720 for Filing
Your Foreign Insurance Excise Tax?
Simple720 vs Other Providers vs Paper Filing
| Filing Features | Simple720 | Other Providers | Paper Filing |
|---|---|---|---|
| Software Download | Not required | May be required | Not applicable |
| License | No license | May require license | Not applicable |
| Contract | No contract | May require contract | Not applicable |
| Cost | Affordable pricing | Often higher cost | Moderate |
| Filing Speed | Fast online filing | Varies by provider | Slower filing |
| Ease of Use | Simple guided process | Platform dependent | Complicated manual process |
| Efficiency | Highly efficient | Varies by provider | Less efficient |
| Tax Calculation | Automatic calculation | Provider dependent | Manual calculation |
| Support | Dedicated support | Limited support | No support |
| Overall Experience | Fast and simple | Varies by provider | More manual effort |
Instant IRS Confirmation! Simple720 gave me instant IRS acknowledgment right after submitting my Form 720. That quick confirmation gave me peace of mind and saved me from the uncertainty of paper filing.
Great Support Team! I had a question about selecting the right tax category, and their support team responded promptly with clear guidance. It's reassuring to know real help is just a message away.
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