Everything you need to know about Tax Form 941

Tax season can be stressful for business owners, and completing the necessary paperwork can be intimidating. Form 941 is the IRS’s quarterly employment tax return and is used to report wages, salaries, and taxes withheld from employees. Here, we’ll discuss all you need to know about Form 941, including the information to provide, when to file, and how to submit it. This guide will help ensure that you’re filing your taxes accurately and in compliance with the IRS.

What is tax form 941?

Form 941 is an IRS form used to report income tax withholding for Medicare, Social Security, and federal income tax. This form helps the IRS track and verify employee wages subject to payroll tax withholding. Compliance with IRS tax laws requires the federal quarterly tax return to be filed by all employers in the United States, even if there are no employees during some quarters.
You must use Form 941 as part of your Federal payroll tax planning to report your withholdings accurately because errors could lead to an audit, fines, or other penalties.

Form 941

How does tax Form 941 affect individual taxpayers?

Form 941 is important because it affects how much you owe in taxes for the current year. If your employer has not submitted any employment tax to the IRS during a given quarter, then you may be liable for more taxes than what was reported on your form W-2 at the end of that quarter. Such situations can lead to costly penalties being assessed against you when filing your annual personal tax return with the IRS if you fail to include this information on your return. In addition, if your employer fails to submit its required Form 941 and withholding tax payment during a given quarter, then it may be subject to substantial fines or other penalties levied by the IRS.
Tax Form 941 plays an important role in ensuring accurate reporting of payroll tax as well as helping employers meet their employment tax obligations throughout each reporting period. The form helps employers track how much they’ve paid out in wages and also provides proof of payments made throughout each quarter when filing with the IRS annually.

Form 941 filing deadlines

The deadline for filing Form 941 is the last day of the month, following the end of the quarter. For instance, if you are paying taxes on income earned in July through September (the third quarter), you should file your form 941 by October 31. Please note that this is also the deadline for paying any applicable employment tax liability due with your filing.
Here are the calendar deadlines for filing Form 941:

  • First quarter: April 30, for the period covering Jan. 1 to March 31.
  • Second quarter: July 31, for the period covering April 1 to June 30.
  • Third quarter: Oct. 31, for the period covering July 1 to Sept. 30.
  • Fourth quarter: Jan. 31, for the period covering Oct. 1 to Dec. 31.

If you cannot finish your quarterly tax return before the due date or cannot pay any tax liability by that date, it is possible to extend your filing deadline. You can submit a completed copy of Form 4868 to the Internal Revenue Service before your original due date.

Information you need to complete Form 941

To complete Form 941, employers will first need to have the following information:

  • Employer Identification Number (EIN)
  • Employer’s name, address, and telephone number
  • Employer’s tax period
  • Total wages, tips, and other compensation
  • Total taxes withheld from employee wages
  • Total credits claimed, such as the credit for social security and Medicare taxes

Once all the required information is gathered, employers can begin filling out the form. It includes entering their employer information, the wages they’ve paid, the taxes they’ve withheld, and any other applicable credits. Employers should also double-check to ensure that all the information on the form is accurate.

The IRS has released two revisions of Form 941. The first revision, released in the summer of 2018, was in response to the Tax Cuts and Jobs Act (TCJA). This law changed a variety of taxes, including individual income tax rates, corporate income tax rates, and payroll taxes.

In 2020, COVID-19 changed many aspects of our lives. To help address employee needs and employer concerns regarding employment taxes during this period, Congress passed the Coronavirus Aid Relief and Economic Security (CARES) Act on March 27, 2020. This act includes provisions that affect various federal payroll laws.

How to calculate totals on form 941

Working with a tax attorney or CPA for tax help is the best way to ensure all of the facts and figures on your IRS tax form 941 are correct. In the meantime, you can calculate certain categories on your own for estimates like:

  • Income Tax Withholding = Employee’s Tax Rate x Total Quarter’s Wages
  • Social Security Tax = 12.4% SS Rate x # of Employees x Wages
    • The max wage is $132,900 per employee as far as SS is concerned
  • Medicare Tax = 2.9% Medicare Tax Rate x Total Taxable Wages
    • Fixed earnings of $200,000 or more require an additional 0.9% Medicare tax paid by the employee.

What are the penalties for not filing?

If you fail to file your quarterly federal tax return by the due date, the IRS may impose penalties, including fines and interest charges. The penalty depends on the amount of tax liability and the time the taxes remain unpaid. Additionally, if you fail to file Form 941, you may be subject to criminal or civil penalties, depending on the circumstances.
Understanding Form 941 can help you ensure that you file your taxes correctly and on time. Make sure you double-check all the information on the form and file it by the due date to avoid any penalties.

Where to file form 941?

The easiest way to file tax form 941 is electronically via an online portal on the IRS website and then transferring funds through EFTPS.gov to the Social Security Administration. You can also mail in your documents with a written business check made out to the “United States Treasury” that includes your EIN. You can send this envelope to:

Address without Payment

Department of the Treasury

Internal Revenue Service

Ogden, UT 84201-0005

Address with Payment

Internal Revenue Service

PO Box 37941

Hartford, CT 06176-7941

Tax form 941 consideration

The best way to get your tax form 941 filed correctly and on time is by hiring a CPA firm with the experience and knowledge to ensure everything is timely. That is where the expert team at H&S Accounting & Tax Services can help. We are a highly regarded local tax preparation and business service in Hollywood, Florida. Our team has direct experience working with tax form 941, not only from our numerous business clients but because we also have to file the same documentation. Reach out to our team today online or give us a call at (954) 613-7240. We look forward to working closely with you and your team for smoother payroll tax reporting.