If you are a business employer who is not a farmer, you will file the quarterly Form 941, to report wages you have paid, tips
your employees have received, federal income tax withheld, social security and Medicare
taxes withheld, your share of social security and Medicare taxes, and advance earned
income credit (AEIC) payments. A separate Form 941 is filed for each quarter. The first
quarter is January through March. The second quarter is April through June. The third
quarter is July through September. The fourth quarter is October through December. Form
941 is due by the last day of the month following the end of the quarter. For example,
wages you pay during the first quarter, January through March, must generally be reported
on Form 941 by April 30th. If the due date for filing a return falls on a Saturday, Sunday
or legal holiday, you may file the return on the next business day. Agricultural employers
will file the annual return, Form 943.
Most employers are required to deposit their employment taxes before the Form 941 is
filed. For the rules for making deposits, refer to Topic 757. If
you have deposited all your tax on time, you may file Form 941 ten days after it would
normally be due.
The total social security and Medicare taxes on Form 941 may differ by a small amount
from the total on your payroll records, due to fractions of cents that you gained or lost
when computing separate amounts for individual employees. You may add or subtract this
difference on the line for social security and Medicare adjustments. Generally, this
should not be more than a few cents. You may also use this adjustment line to correct the
social security and Medicare taxes you were unable to collect on employees' tips, or for
social security and Medicare taxes withheld from your employees'sick pay by a third party,
such as an insurance company.
The income tax withheld and social security and Medicare taxes are added together on
Form 941. If you made advance earned income credit payments to employees during the
quarter, the total amount is subtracted from your total taxes. Refer to Topic 754 for more information on advance earned income credit.
The resulting net tax, is the amount of employment taxes you owe for the quarter. If
this amount is $500 or more, you must also complete the Monthly Summary of Federal Tax
Liability portion of Form 941 if you are a monthly schedule depositor, or Schedule B
(Form 941), if you are a semi-weekly depositor or have accumulated a tax liability of
$100,000 or more on any day. The purpose of this part of the form is to show the IRS when
you were required to make deposits and, whether they were made timely.
On the record of liability (the monthly summary or schedule B), you must show the
combined amount of social security, Medicare, and income tax owed for each month or day.
Your liability for employment taxes occurs when you actually pay the employees their
wages, not when the pay period ends. For example, if your pay period ends September 24th,
but you do not pay the employees until October 1st, their wages would be reported in the
fourth quarter, when you actually became liable for the tax, not the third quarter when
the pay period ended.
It is very important that you complete the tax liability record correctly, or it may
appear that you did not deposit your taxes when due. There is a late deposit penalty
ranging from 2% to 15%, depending on the length of time the deposit is late.
Generally, if your tax liability for the quarter is $500 or more and you have made the
proper deposits, you should not have a balance due with Form 941. Generally, only
taxpayers with a tax liability of less than $500 may pay with the tax return. If you pay
taxes with your tax return that should have been deposited, you may be subject to a
penalty. Be sure Form 941 is signed and dated before mailing it to your service center.
Publications you may find helpful are Publication 15, Employer's
Tax Guide, and Publication 15-A, Employer's Supplemental Tax
Guide. Publications can be ordered by calling 1-800-829-3676, or downloaded from this web site.
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