What is tax form 941 and who must fill it out?

IRS Form 941 is the form your business uses to report the income and payroll taxes you withheld from your employees’ wages. —Getty Images/BartekSzewczyk

IRS Form 941 is one of many IRS tax forms that business owners should be familiar with. Form 941 must be filed regularly. Therefore, it is important to set up your accounting systems correctly to make the reporting and filing process as transparent as possible. Take the time to understand what information is required on Form 941 and make filing this document a part of business as usual.

[Read more: Working as an Independent Contractor? These Resources Will Help You Manage Your Taxes]

What is IRS Form 941?

IRS Form 941 is more commonly known as the employer’s quarterly federal income tax return. This is the form your company uses to report the income taxes and payroll taxes you withheld from your employees’ wages. It also provides a space to calculate and report Social Security and Medicare taxes.

Most businesses are required to file Form 941 quarterly, with a few exceptions. Seasonal businesses only need to file for the quarters in which they operate. Businesses that hire farm laborers or domestic workers, such as a housekeeper, also do not need to file Form 941 (but must complete Schedule H of Form 1040). And if your business pays less than $1,000 in employment tax in a given tax year, you’ll need to file Form 944 instead.

[Read more: A Complete Guide to Filing Your Business Taxes]

What should you report on Form 941?

Businesses must complete Form 941 to report federal employee deductions. This includes information such as salaries; employee tips (as reported); federal income tax withholdings; employer and employee shares of social security and health insurance contributions; and additional Medicare tax deductions. You may also need to include quarterly adjustments to Social Security or Medicare taxes for things like sick pay or tips.

Accounting for these items will result in a total amount of money you will need to pay to cover your payroll tax responsibilities for the quarter.

Note that there are penalties for not filing Form 941. The IRS charges a penalty of 5% of the total amount of tax owed, and your business will continue to be charged an additional 5% each month the filing fails. was not submitted until five months.

How to complete Form 941

There are two options for filing Form 941: by mail or electronically. The most convenient option is to use the federal e-File system. You can access it through many common small business tax software providers, such as TurboTax, H&R Block, or TaxSlayer. If you’re working with an accountant or CPA, they’ll likely have access to an electronic filing tool and can submit the form and payment on your behalf.

Alternatively, you can send Form 941 directly to the IRS. “The mailing address depends on the state of your business, whether you’re submitting payment with your return, and for which quarter you’re filing,” NerdWallet notes. The IRS provides a list of addresses here based on your state. If you need to send payment, send a check payable to the US Treasury with your form.

When is Form 941 due?

File Form 941 with the IRS one month after the last day of the reporting period to avoid penalties. This means that the due dates are:

  • April 30for the first quarter covering the period from January 1 to March 31.
  • July 31for the second quarter covering the period from April 1 to June 30.
  • October 31for the third quarter covering the period from July 1 to September 30.
  • January 31for the fourth quarter covering the period from October 1 to December 31.

Note that there are penalties for not filing Form 941. The IRS charges a penalty of 5% of the total amount of tax owed, and your business will continue to be charged an additional 5% each month the filing fails. was not submitted until five months.

“In addition to not having filed, if you have not paid your tax bill due, you will initially be charged 0.5% of the unpaid tax amount, and this charge will increase each month the payment remains unpaid. The penalty will increase to 1% ten days after the notice of intent to levy from the IRS,” TaxBandits wrote.

CO— aims to inspire you from the best respected experts. However, before making any business decision, you should consult a professional who can advise you based on your personal situation.

follow us on instagram for more expert advice and business owner stories.

To stay up to date with all the news impacting your small business, head here for all of our latest small business news and updates.

CO—is committed to helping you start, manage and grow your small business. Learn more about the benefits of U.S. Chamber of Commerce small business membership here.

standing man looking at phone

A message from

A 401(k) your employees can manage from a phone?

About time. Give your employees access to a personalized retirement plan and tools to help them save and invest.* Are you? You will be able to manage your employees’ 401(k) forms in an easy to use dashboard. Win-win.

*Investing involves risk.

Learn more

Posted on July 19, 2022



Source link

Comments are closed.