[Weekly Sharing Session ] The ins and outs of American tax forms: The secrets behind imports as reflected in Form 7501

This week’s presentation was delivered by our colleague Stan, who shared some very practical and insightful information on “US tax returns”.

From the most common CBP 7501 tax forms to Bond guarantees, import customs clearance procedures, and the breakdown of various taxes and fees – this time, we have finally managed to transform those “unintelligible tables” into “logical information that can be easily understood”.

1. The first step in the customs clearance process: You must have a valid identity to obtain the “customs clearance code”.

For the import of general goods into the United States, whether by air or sea, it is necessary to have an Import of Record No. first. If the importer is a U.S. company, the EIN or IRS number should be used; if it is an offshore company, the registration number of the Ultimate Consignee must also be provided. Otherwise, the goods will not be allowed to be imported at all.

2. What is a Bond? The “guarantee deposit” behind customs clearance

A Bond is a tripartite agreement between the importer, the guarantee company, and the US Customs, designed to ensure the following:

① All taxes and fees have been paid in full (the guarantee company pays them on behalf of the client).

② Comply with regulatory requirements (provide accurate information and allow inspections).

There are two types of Bonds:

① One-time bonds (imported occasionally);

② The annual Bond cost for regular imports ranges from approximately $400 to $800 per year.
👉Without Bond, it is impossible to clear the goods through customs, even if an IOR is available.

3. The three major tax and fee structures: Understanding them is essential for accurately calculating costs.

①“DUTY” (tariffs): Calculated based on the HS code;

②MPF (Cargo Handling Fee): 0.3464%; the minimum amount is $31.67, and the maximum amount is $614.35.

③HMF (Port Maintenance Fee): 0.125%; applicable only to sea transportation.

A small reminder: The upper and lower limits of MPF may be adjusted; making a mistake in calculating these limits can lead to significant financial losses.

4. Understand CBP 7501: Each column contains important information.

①Entry Number→Customs Broker Identification Code

②Bond Type→8: Annual bonds; 9: One-time bonds

③Importer Number→EIN or Bond Number

④Total Value→Total Invoice Amount

A single table that contains information regarding the identity, costs, and responsibilities associated with the entire shipment.

Thanks to colleague Stan for sharing such valuable information. Although U.S. tax forms may seem complicated, they are actually the most crucial “financial records” in foreign trade transactions.Only by understanding a 7501 tax form can we gain a clear picture of the entire import process..