{"id":1447,"date":"2023-02-03T21:10:21","date_gmt":"2023-02-03T21:10:21","guid":{"rendered":"https:\/\/taxreliefprofessional.com\/?page_id=1447"},"modified":"2023-08-27T19:30:55","modified_gmt":"2023-08-27T19:30:55","slug":"form-941","status":"publish","type":"page","link":"https:\/\/taxreliefprofessional.com\/irs-forms\/form-941","title":{"rendered":"IRS Form 941"},"content":{"rendered":"

<– Guide to IRS Forms<\/a><\/p>\n

Just like individuals, businesses must file a tax return with the Internal Revenue Service (IRS). The IRS has designated Form 941 \u2013 Employer\u2019s Quarterly Federal Tax Return for this purpose.<\/p>\n

Use this form to report the amount of taxes you withheld from employees’ paychecks. You\u2019ll also need to report and pay your portion of the payroll taxes<\/a>.<\/p>\n

Let\u2019s discuss some important details about completing and filing this form.<\/p>\n

Who Should File Form 941?<\/strong><\/p>\n

If these two things apply, employers should file the Employer’s Quarterly Federal Tax Return. Firstly, they have standard employees. Secondly, they pay Social Security and Medicare taxes, as well as unemployment insurance.<\/p>\n

    \n
  1. Standard Employees<\/em><\/li>\n<\/ol>\n

    There are different pros and cons for each company when deciding whether to hire standard employees or independent contractors.<\/p>\n

    \u201cUnder common-law rules, anyone who performs services for you is your employee if you can control what will be done and how it will be done,\u201d says the IRS<\/a>.<\/p>\n

    \u201cThis is so even when you give the employee freedom of action. What matters is that you have the right to control the details of how the services are performed.\u201d<\/p>\n

    On the other hand, independent contractors are free to determine everything about their process. Their only obligation is to produce the agreed-upon product in a timely manner.<\/p>\n

    Employers withhold taxes for standard employees, but not for independent contractors. Independent contractors have a wholly separate tax framework from standard employees.<\/p>\n

    For that reason, employers do not need to file Form 941 if they get all their services from independent contractors.<\/p>\n

      \n
    1. Federal Income Tax and Federal Insurance Contributions Act (FICA) Taxes Withholdings<\/em><\/li>\n<\/ol>\n

      FICA taxes, also known as payroll taxes, are critical to our system. They fund social safety net programs for vulnerable members of our society. Therefore, tax laws empower the IRS to assess steep penalties on mishandled payroll taxes.<\/p>\n

      Employers withhold federal income tax and FICA taxes from each employee\u2019s paycheck every pay period.<\/p>\n

      Employers withhold 6.2 percent of gross wages<\/a> for the Social Security tax and 1.45 percent for Medicare tax. The employers then contribute the same as each employee does.<\/p>\n

      The employer holds these taxes in a dedicated bank account. Then, they withdraw and send them to the IRS with Form 941.<\/p>\n

      Federal Tax Deposit Schedule<\/strong><\/p>\n

      Tax law doesn\u2019t only determine how employers report their payroll taxes. It also determines when they must make their deposits to the U. S. Department of Treasury.<\/p>\n

      Your deposit schedule (monthly or semiweekly) coincides with the amount of payroll taxes you report on Form 941. It does not refer to how often you should pay your employees.<\/p>\n

      Nor does it refer to how often you must make deposits into your company\u2019s personal dedicated payroll account. \u201cRather,\u201d says the IRS<\/a>, \u201cthe terms identify which set of deposit rules you must follow when an employment tax liability arises.\u201d<\/p>\n

      For example, if an employer reports more than $50,000 in taxes, then they must deposit on the semiweekly schedule.<\/p>\n

      Form 941 Filing Deadlines<\/strong><\/p>\n

      Individuals have an annual deadline to file their federal tax returns. The deadline is basically the same every year. It\u2019s Tax Day, which is April 15th<\/sup>, give a few days depending on whether it falls on a non-business day. In comparison, employers have quarterly deadlines to file theirs.<\/p>\n

      An employer must file their federal tax return no later than the last day of the month following the end of the quarter. For example, an employer must file their first quarter tax return by April 30.<\/p>\n

      The first quarter consists of the months of January, February, and March. The following month is April. The last day of April is April 30.<\/p>\n

      The second quarter deadline is July 31. The third quarter deadline is October 31. Finally, the fourth quarter deadline is January 31 of the following year.<\/p>\n

      \u201cYou might be able to file an annual federal tax return on Form 944 instead of filing quarterly Forms 941 if you expect your FICA taxes and withheld federal income tax for the year to be $1,000 or less,\u201d says Balance Money<\/a>.<\/p>\n

      Failure to complete and file Form 941 on time generally results in a penalty. \u201cThere\u2019s a late deposit penalty ranging from 2% to 15% depending on the length of time the deposit is late,\u201d says the IRS<\/a>.<\/p>\n

      If the IRS determines that the employer \u201cwillfully fails\u201d to pay the employment taxes, then they can assess the Trust Fund Recovery Penalty (TFRP). Individual representatives for the employer are responsible for the TFRP.<\/p>\n

      The responsible individual(s) must pay a penalty that \u201cis equal to the unpaid balance of the trust fund tax,\u201d according to the IRS<\/a>. That is a penalty of 100%!<\/p>\n

      Depositing Employment Taxes<\/strong><\/p>\n

      The IRS offers a free payment service for payroll taxes. The Electronic Federal Tax Payment System (EFTPS) is easy and convenient for quarterly deposits. Although, it\u2019s important to keep in mind that the IRS doesn\u2019t forgive late payments due to a malfunctioning website.<\/p>\n

      There are other options for payment in the case that the website is unavailable. Instead of using the EFTPS website, call them. They generally take payment over the phone through an automated messaging system. The Treasury accepts payment by paper check, too. Just be sure to drop it in the mail in plenty of time to arrive by the deadline.<\/p>\n

      Additionally, your bank may offer a service, such as a wire or ACH Credit. Contacting a tax professional is especially helpful for those who don\u2019t have time to spare on an unexpected roadblock like this. In fact, some tax professionals do not charge their clients the fees associated with filing Form 941.<\/p>\n

      Getting Help<\/strong><\/p>\n

      Employers must file their quarterly tax returns and deposit their tax payments to avoid penalties and interest. This form calculates how much tax the business collected from employees. It also calculates how much the business owes for its portion.<\/p>\n

      These calculations can be complex and tax law is fluid, especially since we\u2019ve been navigating the pandemic. We invite you to contact us for a free consultation. We\u2019ll discuss what you need and how we can help. There\u2019s no obligation to our firm.<\/p>\n

      You can reach us at 877.959.0975<\/em><\/strong>. Call us today. Sleep better tonight.<\/p>\n

      Resources<\/strong><\/p>\n

        \n
      1. Author Clinton F Wassor on November 30, and Professionally reviewed by Clinton F Wassor. \u201cYour Complete Guide to Unpaid Payroll Taxes.\u201d Tax Relief Professional, 30 Nov. 2022, https:\/\/taxreliefprofessional.com\/unpaid-payroll-taxes<\/a>.<\/li>\n
      2. \u201cEmployment Taxes and the Trust Fund Recovery Penalty (TFRP).\u201d Internal Revenue Service, https:\/\/www.irs.gov\/businesses\/small-businesses-self-employed\/employment-taxes-and-the-trust-fund-recovery-penalty-tfrp<\/a>.<\/li>\n
      3. Murray, Jean. \u201cHow to Calculate FICA Taxes.\u201d The Balance, The Balance, 14 Oct. 2022, https:\/\/www.thebalancemoney.com\/how-do-i-calculate-the-amount-of-fica withholding -tax- -398709<\/a>.<\/li>\n
      4. Murray, Jean. \u201cHow to File IRS Form 941.\u201d The Balance, The Balance, 4 Apr. 2021, https:\/\/www.thebalancemoney.com\/how-and-when-to-file-form-941-for-payroll-taxes-398365<\/a>.<\/li>\n
      5. \u201cTopic No. 757 Forms 941 and 944 \u2013 Deposit Requirements.\u201d Internal Revenue Service, https:\/\/www.irs.gov\/taxtopics\/tc757#:~:text=You%27re%20required%20to%20deposit,instead%20of%20depositing%20the%20amounts<\/a>.<\/li>\n
      6. \u201cTopic No. 758 Form 941 \u2013 Employer’s Quarterly Federal Tax Return and Form 944 \u2013 Employer’s Annual Federal Tax Return.\u201d Internal Revenue Service, https:\/\/www.irs.gov\/taxtopics\/tc758#:~:text=Penalties%20%2D%20It%27s%20very%20important%20that,time%20the%20deposit%20is%20late<\/a>.<\/li>\n
      7. \u201cUnderstanding the Relationship between FICA and Form 941.\u201d Chamber of Commerce, 30 Dec. 2020, https:\/\/www.chamberofcommerce.org\/relationship-between-fica-and-form-941<\/a>.<\/li>\n<\/ol>\n","protected":false},"excerpt":{"rendered":"

        <– Guide to IRS Forms Just like individuals, businesses must file a tax return with the Internal Revenue Service (IRS). The IRS has designated Form 941 \u2013 Employer\u2019s Quarterly Federal Tax Return for this purpose. Use this form to report the amount of taxes you withheld from employees’ paychecks. You\u2019ll also need to report and […]<\/p>\n","protected":false},"author":4,"featured_media":0,"parent":1486,"menu_order":0,"comment_status":"closed","ping_status":"closed","template":"basic-template.php","meta":{"inline_featured_image":false,"footnotes":""},"acf":[],"yoast_head":"\nIRS Form 941 - Tax Relief Professional<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/taxreliefprofessional.com\/irs-forms\/form-941\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"IRS Form 941 - Tax Relief Professional\" \/>\n<meta property=\"og:description\" content=\"<– Guide to IRS Forms Just like individuals, businesses must file a tax return with the Internal Revenue Service (IRS). The IRS has designated Form 941 \u2013 Employer\u2019s Quarterly Federal Tax Return for this purpose. 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