The IRS has released Schedule B for Form 941, which displays the total wages, social security tax withheld, federal income tax withholding, and Medicare taxes withheld for each employee. The form also includes a total of all the wages, federal income tax withheld, social security tax withheld, and Medicare taxes withheld for the entire year.
If you are an employer, you are responsible for withholding federal income taxes, Medicare taxes, and social security taxes from each of your employee’s wages. If you do not withhold these taxes, or withhold them but do not pay over these taxes to the government, you will be held responsible. The Schedule B instructions are included in the form instructions.
What is a Schedule B (Form 941)?
One of the most common questions new payroll professionals ask is, “What’s a schedule B?” or “Why do I need to file a schedule B?” Schedule B is a daily report of the tax liability of the employer for Federal income tax withheld from employees.
In order to determine how much taxes to withhold from their employees for the IRS, businesses need to complete Schedule B (Form 941). The number of employees, the number of days the business is in operation, and the amount of gross income all factor into the calculation. Schedule B (Form 941) requires employers to mark a “Yes” or “No” to indicate if they withhold federal income from their employees’ pay. Schedule B (Form 941) also requires employers to list the amount of federal income tax withheld from each employee for the period. The amount of federal income tax withholding is the total of the employee’s Federal income tax withholding and the employer’s share of Social Security and Medicare taxes.
How To Know if the Organization Needs Schedule B in Form 941?
Although there are quite a few different forms employers need to file with the IRS, Schedule B is rarely one of them. In fact, Schedule B is only required to be filed if the employer is a 5% or more owner of a non-corporate business and the total wages paid to employees of that business totaled more than $1 million.
Filing an accurate Form 941 each quarter is vital for any company that collects or pays payroll taxes. However, a business only needs to file Schedule B (Form 941) if its total employment taxes for the quarter are $1,000 or more. Still, even if you do not need to file Schedule B with the IRS, you should keep it on file for at least four years.
Why should you File Schedule B (Form 941)?
Most people are familiar with Form W-2. This is a tax form that is filed by employers to report wages paid to employees and the amount of taxes withheld from the employee’s paycheck. If you’re self-employed, you’re responsible for paying quarterly taxes on income and reporting your income and expenses to the IRS. For the first quarter, you report the taxes you withheld from your employee’s paychecks and your business expenses on Form 941 or Form 944. A schedule B is attached to Form 941 to identify the total wages you paid your employees during the quarter, and you must prepare a schedule B on Form 944 for each quarter that you filed your return electronically.
Final Words
Form 941 is a vital form for all organizations that pay workers and withhold federal and FICA taxation. To know more about Form 941, Schedule B, 941 due dates, 941 basic requirements, and much more, attend the Compliance Prime webinar.
