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Form 941 is the form you use to report your income for taxes. You fill out this tax form as part of preparing and submitting your yearly Form 1040 tax return, which helps determine if you owe a certain amount of money or how much refundable credits (such as an Earned Income Tax Credit) are available to you.
Because filling out Form 941 may be time-consuming and difficult, we’ve broken it down into a few simple stages to assist you.
The following are the six stages to correctly completing your Form 941:
1. Complete Employer Identification & Reporting Quarter Box
You will submit basic information regarding your company in this part, such as its name, tax ID, and postal address. You’ll also need to specify which quarter you’re submitting the return for.
2. Fill out Part 1 of Form 941, Lines 1 through 15.
The next step is to fill out Part 1 of Form 941, which consists of 15 lines:
- Line 1 – In the quarterly payment period, total the number of workers who earned salary, tips, or other remuneration (such as bonuses or commissions).
- Line 2 – For the quarter, total salary, tips, and other remuneration (such as bonuses or commissions) are provided to workers.
- Line 3 – For the quarter, include the federal income tax deducted from employee pay, tips, and other remuneration (such as bonuses or commissions).
- If this option is ticked, skip to Line 6 if there are no earnings, tips, or other payments subject to Social Security and Medicare tax.
- Lines 5 a and b – On line 5a, enter the taxable Social Security earnings, and on line 5b, enter the taxable Social Security tips, and multiply by the 0.124 Social Security tax rate.
- Lines 5 c and d – On line 5c, enter the taxable Medicare salaries, and on line 5d, enter the taxable Medicare tips, and multiply by the Medicare tax rate of 0.029.
- Line 5e – Add the totals from lines 5a through 5d in Column 2 and write the total on this line.
- Line 5f – Enter the amount of tax owed on unreported tips (see IRS Publication 15 for more information)
- Lines 6–9 – Make any necessary modifications (see IRS Publication 15 for more information)
- Line 10 – Add the totals from lines 6 through 9 and write them on this line.
- Lines 11 a-g – Enter the Small Business Payroll Tax Credit on lines 11 a-g (see IRS Publication 15 for more information)
- Lines 12 –Subtract line 11g from line 10 on line 12.
- Lines 13 a-i – List all of the payments you made during the quarter, including withheld income tax and the employee and employer portion of Social Security and Medicare taxes.
- Line 14 – If there is a balance owing, figure it out.
- Line 15 – Calculate any overpayments.
3. Fill out Part 2 of Form 941, Line 16
You must choose the sort of depositor you were for the quarter in this area (monthly or semiweekly). You will input the FUTA tax obligation for each month if you were a monthly depositor. Schedule B must be completed if you were a semiweekly depositor.
4. Fill out Part 3 of Form 941, Lines 17 and 18.
If your firm closed during the year or you fired all of your workers, you must report the date your business closed and/or ceased paying employees’ salaries. Furthermore, if you are a seasonal employer who is not required to submit a quarterly 941 form, you must provide this information in this box.
Lines 19-28 are only applicable to businesses with eligible health plans or qualified leave wages. You may move forward to section 4 if this does not apply to you.
5. Fill out Part 4 of Form 941.
According to the instructions for Form 941, you may authorize the IRS to talk with someone on your behalf regarding this form. You might, for example, designate your CPA as a third-party designee. Make certain to provide their full name and phone number. You may choose no if you don’t wish to nominate anybody.
6. Fill out Part 5 of Form 941.
In this part, you will sign and date Form 941, confirming that you agree with the information on the form and that it is correct to the best of your knowledge.
Filing and paying taxes may be a snap if you utilize a payroll service like Gusto. Gusto handles all elements of payroll, including automatically filling out papers like the IRS Form 941.
Who is required to file Form 941?
You must withhold taxes from your workers’ paychecks as an employer. Income taxes, Social Security taxes, and Medicare taxes are all examples of these taxes. The IRS requires you to file Form 941 quarterly to report these taxes. Along with the employee’s portion of FICA taxes, the employer’s share is reported on Form 941.
To report the following, you must utilize Form 941:
- Wages that you paid to your workers
- You withheld federal income tax from workers’ paychecks.
You don’t need to submit Form 941 if you just use independent contractors.
When Should Form 941 Be Filed?
Regardless of whether you deposit FICA taxes monthly or semiweekly, the deadline to complete Form 941 is the same for all businesses. The final day of the month after the end of the quarter is when Form 941 is due. The due date is the following business day if the due date occurs on a weekend or holiday. Form 941 will be submitted four times every year.
Where Should Form 941 Be Sent?
E-filing is the most efficient method to submit tax forms. The IRS provides a free service that enables you to submit your tax returns online. If you file your tax return online, you may be certain that it will be received on time.
If you want to submit your tax forms, the state in which you reside will decide where your tax return will be sent. The address to send your Form 941 return may be seen in the table below. Keep in mind that information is subject to change, and it’s always a good idea to double-check the postal address before sending anything.
Penalties for late filings on Form 941
Penalties and interest will be imposed if you do not submit Form 941 and/or make your tax payments by the due date. Penalties are usually paid just once, but interest will continue to accumulate until your tax payment is completed.
If you don’t submit Form 941 on time, you might face the fines and interest listed below.
Penalties on Form 941
A failure-to-file (FTF) penalty of 5% of the unpaid tax due with that return will be levied each month the form is not submitted. In most cases, the maximum penalty is equal to 25% of the tax owed.
There is a failure-to-pay (FTP) penalty of 0.5 percent each month of the amount of tax owed if you have a balance owing that should have been paid with your return (e.g., unpaid employer FICA payments). For each month that the payment is late, a penalty is imposed. The maximum penalty is likewise equal to 25% of the tax owed.
The FTF penalty is lowered by the amount of the FTP penalty if both penalties apply in the same month. If you have a good reason for neglecting to file or pay, you won’t be penalized. If you get a penalty notice, you have the option of providing a written explanation of why you feel there are probable grounds.
Interest Form 941
Interest on any outstanding sum accrues from the due date of the tax, in addition to any penalties. You may be personally responsible for the trust fund recovery penalty if income, Social Security, or Medicare taxes that are required to be withheld are not withheld or paid.
Remember that using a third-party payer like Gusto does not absolve you of the obligation of ensuring that your tax returns are submitted and that any taxes are paid or deposited accurately and on time. Most payroll providers, on the other hand, will compensate you for any interest and penalties you may face if they are to blame for your late filing and payment of taxes.
Check out IRS Publication 15 for additional information on fines and interest.
Final Thoughts
As you can see, reporting Social Security, Medicare, and federal income taxes for both you and your workers is a lot of work. You may avoid fines and the hassle of IRS notifications by following these steps for filing and paying your payroll taxes.
Frequently Asked Questions
What is the mailing address for 941 forms?
The mailing address for 941 forms is P.O. Box 631, Herndon, VA 20170-0631
Where do I mail my 941 no payment?
You can find the mailing address on their website. Just click the Contact Us link and look in your area to get a number for customer service, then call them up.
How do I fill out a 941?
A 941 is a form that helps the IRS determine if you are required to pay taxes. The first line of the form asks for your employers’ name, address, and phone number as well as social security numbers for yourself and your spouse.
