Form 941, also known as the Employer’s Quarterly Federal Tax Return, is a form that is used by employers to report employment taxes to the Internal Revenue Service (IRS) on a quarterly basis. In this blog, we will discuss the purpose of Form 941, who needs to file it, and what information is required to complete the form.
- Purpose of Form 941
The purpose of Form 941 is to report the federal income tax, Social Security tax, and Medicare tax withheld from employees’ wages, as well as the employer’s share of Social Security and Medicare taxes. This form also allows employers to report any adjustments made to previously reported taxes, such as corrections to employee wages or taxes withheld.
- Who needs to file Form 941?
Employers who have employees must file Form 941 on a quarterly basis. This includes businesses, nonprofits, and government agencies. Sole proprietors who do not have any employees are not required to file Form 941
- Information required to complete Form 941
To complete Form 941, employers will need to have the following information:
Employee wages: The total wages paid to all employees during the quarter, including tips and bonuses.
Federal income tax withheld: The total amount of federal income tax withheld from employees’ wages during the quarter.
Social Security and Medicare taxes withheld: The total amount of Social Security and Medicare taxes withheld from employees’ wages during the quarter.
Employer’s share of Social Security and Medicare taxes: The total amount of Social Security and Medicare taxes that the employer is responsible for paying.
Adjustments: Any adjustments made to previously reported taxes, such as corrections to employee wages or taxes withheld.
- Filing deadlines
Form 941 is due on a quarterly basis, with the following filing deadlines:
Quarter 1 (January – March): April 30th
Quarter 2 (April – June): July 31st
Quarter 3 (July – September): October 31st
Quarter 4 (October – December): January 31st of the following year
- Penalties for not filing or late filing
Employers who fail to file Form 941 or file it late may be subject to penalties. The penalty for not filing Form 941 is 5% of the tax due for each month or part of a month that the return is late, up to a maximum of 25%. If the return is more than 60 days late, the minimum penalty is $435 or the amount of the tax due, whichever is smaller.
In conclusion, Form 941 is an important form that employers must file on a quarterly basis to report employment taxes to the IRS. It is essential that employers accurately report their taxes and file the form on time to avoid penalties.