Regardless of whether you own and operate a small business or a multi-million dollar corporation, if you pay employees wages, you must file Form 941. The IRS is diligent in how it tracks employee wages and how much should be deducted from those wages in the form of taxes. Form 941 must be filed quarterly (every 3 months) each year. however, if you have employees whose annual payroll tax withholding obligations are less than $1,000, you can file an annual return instead of quarterly.
what is form 941?
There are a few different taxes related to wages that you must report on Form 941:
- Withholding Taxes: These are taxes that are withheld from your employees’ income. You are responsible for withholding these taxes from your employees’ paychecks. the amount you withhold depends on how many withholdings the employee claimed on their w-4 form.
- employer taxes: these are taxes paid by you.
- shared taxes: fica taxes include taxes withheld for social security and medicaid. will retain and forward the employee portion.
As a business operator, you must file Form 941 quarterly for all of your employees. The four-page form notifies the IRS of your employees’ taxable income and liability each quarter, reporting withholding for federal income tax and Social Security/Medicare taxes. Seasonal workers do not need to file form 941 if, and only if, they do not work one or more quarters. all companies are expected to submit this form at the end of April, July, October and January.
Form 941 filing deadlines
All companies are expected to submit this form at the end of April, July, October and January. expiration dates are:
- April 30
- July 31
- October 31
- January 31
If the Form 941 due date falls on a holiday or weekend, the due date will be moved to the next business day. for example, if the due date was July 4th, it would be pushed back to the 5th if it wasn’t a weekend day.
How is Form 941 different from Form 944?
model 941 and model 944 are very similar, since both report tax and income tax withholding. the main difference between the two forms is the amount of tax due for the business filing.
Most small businesses file Form 941 quarterly. But small businesses whose annual and withholding taxes are less than $1,000 can file Form 944. Unlike Form 941, Form 944 only needs to be filed once a year.
form 941 instructions
Filling out and completing your Form 941 is a relatively simple task. you are expected to provide the following information:
- the number of people you employ
- the identifiers of all your employees
- the total wages you paid each employee
- the number of taxes you have withheld
- payroll records
- documentation of any taxable tips your employee’s report
- the total amount you must send to the irs
li>
form 941 calculations
Here are some general calculations to help you determine your tax liability for the different types of taxes on Form 941.
- how to determine an employee’s tax rate: your tax rate is determined by your filing status and annual earnings
- how to determine the total salary paid for the quarter :Divide your employee’s annual salary by 4.
Note that social security tax only applies to the first $132,900 of an employee’s salary.
Employees earning a fixed income must pay an additional 0.9% Medicare tax on earnings over $200,000. This additional tax is paid by the employee, not you, and must be deducted from your salary.
It can be time consuming and tedious to do all of these calculations, especially if you have multiple employees that you have to do them for. a tax professional can help you make these calculations and quarterly payments.
employer responsibilities
As an employer, the responsibility to file Form 941 as accurately as possible and provide all necessary details rests on your shoulders. All data included on Form 941 should reflect what your employees will claim or submit on their IRS W-2 form. Failure to provide the IRS with accurate wage and withholding information could result in an IRS audit.
The employer is also responsible for making an additional payment to the IRS that equals the amount of money withheld for Social Security and Medicare taxes for all of its employees. Beginning in 2015, the employer portion of payroll taxes must withhold additional Medicare tax from wages paid in excess of $200,000 during each tax year, as well as any other taxes withheld.
avoid penalties and meet deadlines
If you want to avoid IRS fines and penalties, it’s best to file Form 941 on time. failure to do so may result in a penalty of 5% of the tax due for each month or part of a month that is late. however, that fine is capped at 25%. additionally, there will be a separate penalty for paying less than these taxes; The IRS will charge the employer 2-15% of the underpayment, depending on how many days the employer is late in paying the correct amount. at the end of the tax year, the total amounts you report on form 941 must equal the total of all amounts you reported on your employee’s w-2 and w-3 forms.
If you want to avoid a situation where you face penalties and a possible IRS audit, it is recommended that you use professional payroll services to handle all employee and business related taxes. A licensed tax professional or CPA will not only keep you and your business out of trouble with the IRS, but may even be able to find ways to save you money on your taxes.
One of the many ways businesses fail is by falling behind on their taxes and the resulting penalties. If you don’t want to be among the many small businesses that don’t succeed in their first three years, it’s extremely important to be aware of deadlines and penalties.
Can form 941 be filed electronically?
You can file Form 941 electronically if you wish. You can file Form 941 online through the IRS website, and you must use the eftps.gov service to transfer funds electronically. a tax professional can help your business with filing online.
where to send form 941
once you’ve completed your form and written a check to the “united states treasury”, be sure to include your ein (if you don’t already have one, you can request one online). there are two different 941 email addresses:
- internal revenue service of the treasury department; ogden, ut 84201-0005: This address is used for any business that wants to file a return without a payment attached.
- Internal Revenue Service, P.O. Box 37941; hartford, ct 06176-7941: This address is for businesses that want to include a payment with their 941 tax form.
In an effort to reduce the amount of paper used to file taxes and forms, the IRS will allow you to file your 941 tax forms online. The IRS may request copies of records from electronic accounting software, so make sure you have them on hand if you choose to file online. If you don’t use digital accounting services, there may be certain documents and proof of filing details that the IRS will ask you to mail (even if you file online).
presentation of tax form 941 with a professional
For all of your business tax and filing needs, Community Tax is here to help. our dedicated and qualified staff is here to help you file your taxes correctly and on time. Find out why businesses across the country trust Community Tax for all of their employee payroll filings and services. Call (888) 684-5798 today and we’ll set up an easy and convenient way to pay your employees while we take care of the details while you focus on your business.