Complying with federal payroll tax rules as a business owner in the US requires knowing what is 941 tax. Income taxes, Social Security taxes, and Medicare taxes withheld from employee pay are reported on IRS Form 941.
Form 941 is the official name for the Employer’s Quarterly Federal Tax Return. Employers use IRS Form 941 to report income taxes and other taxes withheld from a worker’s paycheck.
By submitting Form 941, companies may determine their quarterly payroll tax burden and guarantee that the IRS is paid on time.
How to File 941 Tax?
Knowing how to submit a 941 tax properly is essential while learning about it. There are five sections and three pages in the form. On page one, employers are required to include their company name, address, and Employer Identification Number (EIN) in addition to the relevant quarter they are reporting:
- First Quarter: January – March
- Second Quarter: April – June
- Third Quarter: July – September
- Fourth Quarter: October – December
The final day of the month after each quarter – April 30, July 31, October 31, and January 31 – is when the filing deadlines are due. The IRS’s Modernized e-File (MeF) system allows you to file or send the form electronically.
What are the Parts of 941 Tax Filing?
There are five major sections for filing 941 tax:
Part One
In this section, you must report:
- Paid wages
- Withheld taxes
- Total taxes owed
You can apply for overpayments in the next quarter or refunded.
Part Two
In the second part of the form, mention your deposit schedule – either monthly or semi-weekly. Bigger tax amounts require next-day deposits.
Part Three
In the third section, you must mention if:
- Your business is dissolved
- You have stopped paying wages
- Your business operates seasonally
Part Four
In this section, authorize a representative, such as a CPA, to discuss your return with the IRS.
Part Five
Sign, date, and provide your contact details. If you have received help from a paid preparer, mention their information as well.
Who Must Fill Out Form 941?
You are required to file a 941 tax every quarter if your wages are due to:
- Medicare
- Social Security
- Federal income tax
What Happens If I Don’t File Form 941?
Fines for not filing 941 taxes include:
- 0.5% penalties on unpaid taxes
- 5% of the tax due per month (up to 25%)
The Bottom Line
Businesses must comprehend what is 941 tax to stay in compliance and avoid fines. Speak with our tax adviser to guarantee appropriate filing. Call now!
