You are typically required to file IRS Form 941 if you pay wages to employees working for you. Certain employers whose annual payroll tax and withholding liabilities are less than $1,000 might get approval to file the annual version—Form 944.
- Generally, any person or business that pays wages to an employee should file a Form 941, Employer’s Quarterly Federal Tax Return.
- You have a month to prepare each form, since it’s due by the last day of the month following each quarter: April 30, July 31, October 31, and January 31.
- Employers of household employees, seasonal employees, and agricultural employees often do not have to file Form 941, but instead report their wages paid in different ways.
- In addition to federal income tax withheld from employees' paychecks, the quarterly payment has to include 6.2% of each employee’s wages for Social Security insurance (up to $160,200 in 2023) and 1.45% of all taxable wages for Medicare tax.
If you operate a business and have employees working for you, then you likely need to file IRS Form 941, Employer’s Quarterly Federal Tax Return, four times per year. As an employer, you are responsible for withholding federal income tax and other payroll taxes from each employee’s paycheck and remitting it to the IRS. Each Form 941 you file reports the total amount of tax you withheld from employees' pay during the quarter as well as the employer's share of payroll taxes.
Who has to file Form 941
Generally, any person or business that pays wages to an employee has to file a Form 941 each quarter and needs to continue to do so even if there are no employees during some of the quarters. Exceptions to this filing requirement are for seasonal employers who don’t pay employee wages during one or more quarters, employers of household employees and employers of agricultural employees. Employers of agricultural employees typically file Form 943 instead of Form 941.
Completing Form 941
Each time you prepare a Form 941 for the quarter, you have to report the:
- Number of employees you have
- Total wages you paid
- Amount of taxes you withheld
- The amount you need to send to the IRS
Before starting the form, you need your payroll records plus documentation for any taxable tips your employees report to you.
When you calculate the amount to send to the IRS, in addition to federal income tax withheld, the payment needs to include:
- 6.2% of each employee’s wages, up to $160,200 in 2023, for Social Security insurance
- 1.45% of all taxable wages for Medicare tax
As the employer, you are responsible for making an additional payment to the IRS for the employer's portion of Medicare and Social Security taxes. Employers are also required to withhold Additional Medicare Tax from wages paid in excess of $200,000 during the year in addition to any other taxes withheld and send this amount along with the other tax payments.
At the end of the year, the total amounts you report on the four Form 941s for withholding from employee wages needs to equal the total of all amounts you report on the W-2 forms you distribute to employees, as well as the Form W-3 you send to the government.
Form 941 filing deadlines
Since you file a separate form for each quarter, the IRS has four filing deadlines. These are:
- April 30
- July 31
- Oct. 31
- Jan. 31
Just remember that the filing deadline always falls on the last day of the month following the end of the quarter. This gives you one month to prepare the form before submitting it to the IRS.
Failure to timely file a Form 941 and pay any tax due may result in a penalty of 5% of the tax due with that return for each month or part of a month the return is late. The penalty caps out at 25%. A separate penalty applies for making tax payments late or paying less than you owe. The penalties are 2% to 15% of your underpayment, depending on how many days you are late paying the correct amount.
At the end of the year, the total amounts you report on the four Form 941s for withholdings from employee wages needs to equal the total of all amounts you report on the W-2 forms you distribute to employees, as well as the Form W-3 you send to the government. If something doesn’t add up, you will likely hear from the IRS.
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