What is IRS form 941 for? How to fill in and submit it? Do you need to file IRS form 941?
Find answers to all these questions in our mini-tutorial on how to submit IRS form 941.
What is US Form 941
It is a standard tax form along with other US governmental forms. It has to be filled in and submitted by employers during the year on a quarterly basis. It is dedicated to tracking FICA tax payments.
Those taxes usually include Medicare and Social Security taxes. The taxes are done on a monthly and semiweekly basis. The employer rates are generally around 6.2% and 1.45%.
The form can be easily downloaded on the official website.
Who Needs to Submit US Form 941
If you are an employer, you need to hold taxes from your workers, for example, standard income taxes, Medicare and Social Security taxes, and more. You should definitely file IRS form 941 for the following:
- The federal income tax that was held after employees paychecks;
- Salaries and tips that were given to your employees;
- All Medicare and Social Security taxes.
In case, you hire freelancers who are independent contractors, you don’t have to file Form 941. You only need to do that in the case of full-time employees you’re hiring.
How to Fill in Form 941 Correctly
This is an easy form that consists of 2 pages. It has 5 parts, each of them includes specific information about the company, wages paid, federal income tax withheld, and other taxes.
All you need to do is to download the form and thoroughly complete it until the end using the instructions below.
1. Complete Company’s Basic Information
Here, you need to supply the details about your company such as its name, tax ID, mailing address, etc. It is important to specify the reporting period.
2. Fill in Part 1 of IRS Form 941 in 15 Steps
- Step 1 – You need to enter the number of all employees who received wages, tips or any other payment during the last quarterly period;
- Step 2 – This area is for submitting any specific compensations to your employees;
- Step 3 – Here it is time to provide federal income tax from employee paychecks for the whole quarter period;
- Step 4 – Use this check box if there is no information to provide for Medicare and Social Security taxes;
- Step 5 – On the contrary, if you have data to provide – report those taxes here;
- Step 6-9 – Here you can enter all the adjustments you can;
- Step 10 – Enter the total on lines 6 to 9;
- Step 11 – Small Business Payroll Tax Credit can be added here;
- Step 12 – Deduce the numbers between step 11 and 10;
- Step 13 – This is where you enter your whole payments for the quarter, it may include income tax and Social Security and Medicare taxes;
- Step 14 – Due balance is calculated at this stage;
- Step 15 – Overpayment is calculated at this stage.
3. Fill in IRS Form 941 Part 2 and 3
Here you provide the depositor type that can be attributed to you for the previous quarter. You can either be a monthly or a semiweekly depositor. If monthly, you just complete the FUTA tax per month. If semiweekly, you should download a separate form here.
In case your business was closed for some time during a year, you need to state the dates accordingly.
Moreover, for seasonal employers, section 3 is required in order to indicate their type.
4. Fill IRS Form 941 Part 4 and 5
In section 4, you can allow another person to speak on your behalf if necessary. Make sure you provided their complete name and telephone number. Otherwise, please select no.
Section 5 is generally to have your agreement to the fact that the information you provided is true and accurate.
Fill in IRS Form 941 – Frequently Asked Questions
Can I File 941 Online?
Yes, according to the IRS, you can fill form 941 online, which is faster than filing paperwork. Moreover, e-filing is secure and accurate, which helps you to comply with ePHI requirements. If this is the first time that you are filling form 941, using the online form allows you to know when you are making incorrect entries.
Can I File 941 Online For Free?
Electronic filing of 941 is free and is done on the Electronic Federal Tax Payment System. You can access it on the IRS website, and fill it quarterly. If someone is trying to sell you form 941, then they could be trying to defraud you.
However, if you want a tax accountant to fill it for you, then they may charge you a fee for their service, but not for access to the actual 941 online forms.
Do I Have to File Quarterly 941 if no Payroll?
If you have no payroll, then you don’t have to file form 941, because you don’t have any tax liability. This is true for seasonal employers, who may not have employees during one or more quarters of the year, and therefore don’t pay wages.
However, you must tell the IRS that you won’t be filing a tax return for the quarter that you won’t have a payroll. To do that, you can check line 18 of form 941, during the quarters that you file form 941. You can check this IRS guide for further guidance.
What Happens if You File 941 Late?
If you fail to file form 941 on time, then you will face a 5% fine, of the amount you owe the IRS, during the first month. The IRS will keep fining you 5% of the amount due, for each month you fail to file your 941 returns, for up to 5 months.
Moreover, the amount you owe the IRS will attract a 0.5% interest, for every month that you don’t pay the taxes you owe the IRS. The fine will then increase to 1%, ten days after the IRS gives you their notice of “intention to levy.”
In that regard, if you fail to file form 941 and make a deposit of the 941 tax amounts on time, the penalties increase each month.
Who is required to File a 941?
You must file form 941 if you operate a business and you have employees.
That is how you can easily fill in IRS form 941 following these basic steps. Sometimes you might want help or additional instructions. That is when you go here.
Most US forms can be easily fillable even with online services like Fill in PDF online. You just need to download the form and complete it using the tools provided by online services. There’s an option to sign PDF afterward.
Most countries accept digital signatures, so it is perfectly legal.