Form 941: Employer’s Quarterly Federal Tax Return

Form 941 is an IRS form that captures the details of payroll processing for the employer and the employer’s employees. While this form is not required for the employer to file, it can be helpful so that the employer can track how much tax is being withheld and where it is being withheld.


What Is IRS Form 941?


Tax forms are a lot like recipes. Each little detail will vary from person to person. For example, some may find that a 2% withheld for federal taxes is sufficient, while others may opt for a 3% withheld for state taxes. You can also make deductions from your self-employment wages to reduce your federal tax liability.


The IRS Form 941, filed during the Payroll Period, is the form used to report any withholding taxes that have been withheld from your pay. It is due on the last day of the month, or semi-monthly, depending on the payroll timing, and is filed electronically with the IRS.


How to File Form 941?


The employers of the United States are allowed to use Form 941, Employer’s Quarterly Federal Tax Return, to report payments of federal taxes withheld on employees’ wages and salaries during the quarter covered by the form. This is an annual requirement. Under current law, the form is prepared on paper and filed with the IRS on or before April 15th of the following calendar year.


Depending on your business, there are three options for how to file Form 941. The most frequently used option is the quarterly method, which requires you to file a return within 16 days of the end of the quarter for which the return is being made. The quarterly method is preferred by businesses that are in the top three percent of all filers. The form requires less paperwork and has less administrative costs and more benefits, such as lower penalties and interest, which can be up to six months above the regular rate.


The Form is prepared by the company’s CPA and is generally filed electronically with the Internal Revenue Service. Form 941 has a significant impact on a company’s cash flow and net income.


Taxes Reported on Form 941


An employer is required to report the amount of taxes paid on wages, tips, and other compensation on Form 941. This form is the employer’s responsibility to complete each year. The employer is not required to report taxes on income that is not subject to withholding for federal income tax purposes. (For example, most interest, dividends, and annuities are not subject to federal income tax withholding.)


There are 4 types of taxes:

  1. Social Security taxes
  2. Federal taxes withheld from worker wages
  3. Medicare taxes 
  4. Extra Medicare taxes on wages over $200,000


Final Words

Employment taxes are a huge responsibility. To learn more about Form 941, attend the Compliance Prime webinar. The webinar will also cover topics like Forms 941 and 941-X, Correcting Federal Payroll Tax Forms, adjusting Payroll Tax Filings for 941, and more.

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