The pandemic may have brought about hardship for many, but it also provided a space for some to realize their dreams. A record-setting 4.4 million new businesses opened their doors during the height of the crisis in 2020—if you were one of those amazing entrepreneurs, then congratulations on making your dreams come true!
Owning a business is no easy feat, though. Not only will you be the sole person responsible for your company, but you may also be responsible for multiple employees. What’s more, you’ll need to keep an eye on every financial transaction, payment, expense, and more to ensure that you report everything accurately to the IRS.
If you have employees, you must file Form 941 four times a year. Below, we’ll go over everything you need to know about filling out a 941 tax form to ensure that you remain compliant.
What Is Tax Form 941?
So, what is Form 941? This specific tax form is designed for businesses with employees. The form reports wages and taxes for all your employees each quarter. In other words, you’ll need to report this information and fill out this form four times a year.
You’ll report the amount of money you withheld from your employees. You’ll report the income taxes, Social Security taxes, and/or Medicare taxes that you withheld. Along with filling out the form, your quarterly tax payments will also be due. Your total tax liability will be determined based on the total amount of taxes due in the current quarter you’re reporting and the total deposits you made during the previous quarter.
How to Fill Out Form 941
You can fill out your Form 941 either electronically or on paper. You can download the appropriate forms directly on the IRS website; you can decide whether you want to print out the forms or fill them out on your computer and submit them directly to the IRS website.
Are you struggling to identify the right forms? Do you need a little extra help? Check out our tax help resources or contact one of our agents for more assistance.
Who Should Use Tax Form 941?
You need to file Form 941 each quarter if you own a business and pay wages to an employee. It’s your responsibility as an employer to provide the IRS with accurate information about the employee’s wages and withholdings. Failing to do so means you’ll face financial penalties and a possible tax audit.
When to Use Tax Form 941
You need to use this tax form when you’ve paid employees, withheld taxes, and need to make your employer contribution to those tax liabilities.
If your total yearly withholding taxes will come to less than $1,000, then you might not need to file a Form 941—you might be able to file a Form 944 instead. Otherwise, you’ll need to use tax Form 941 each quarter.
Form 941 Deadlines
Form 941 is typically due on the last day of the month following the end of each quarter. In other words, the due dates for 2022 are as follows:
- First quarter: April 30, 2022
- Second quarter: July 31st, 2022
- Third quarter: October 31st, 2022
- Fourth quarter: January 31st, 2023
If the filing due date falls on a weekend or holiday, you should file the forms on the next possible business day.
One of the biggest tax problems faced by taxpayers is failing to meet IRS deadlines, especially for forms that are due quarterly. If you don’t file the right forms on time, then the IRS is authorized to levy financial penalties against you. In the beginning, you could face fines of up to 5%. If you continue to fail to file, then that rate could go up as high as 25% of your total tax liability.
If you file the right forms but fail to pay in time, then you’ll get fined about .05% each month—up to 25% of all the taxes you owe. On top of these fines, you’ll also face ever-increasing interest payments.
Form 941 Instructions
Your tax form will include information about your employees, the total wages you’ve paid out, the taxes you’ve withheld, payroll records, tips, and more. Since so much gets covered, Form 941 instructions can get complicated fast.
Here’s a brief overview of how to fill out the form:
- Put your EIN, name, and address in the first box
- Check off the quarter you are reporting in the second box
- In part 1, box 1, enter the wages you’re paying
- Put the total amount of employee compensation in box 2
- Put the total amount of taxes you withheld in box 3
- Next, you’ll go through a series of questions where you’ll need to input the proper taxable amounts collected from employees
- Complete the details about your business in part 3
- Sign the form and print your name on part 5
Are you worried that you can’t meet your tax obligations? Don’t let that fact discourage you from filing your paperwork. There are many tax relief solutions that can help you work out an arrangement with the IRS.
Do You Need Help With IRS Form 941 or Other Tax Issues?
Now that you’ve read through this article, you should feel more confident when it comes to filling out Form 941 and ensuring you’re compliant. Despite that, Form 941 won’t be your only concern. There are several other tax codes, forms, and nuances you’ll need to remain compliant with to ensure your business runs smoothly.
Do you have more questions about tax Form 941? Do you have other questions about other tax requirements you might face in 2022? The good news is that you won’t have to go far to find the answers you seek. For more free resources, keep browsing our blog.
If you’d prefer to speak with a highly qualified and skilled tax expert, then we welcome you to reach out to our office. Our team is made up of tax attorneys, certified CPAs, enrolled agents, and CTEC certified tax consultants. Contact us directly at (800) 264-1869 to learn more about how we can help you solve all your tax problems in 2022 and beyond.