IRS 941 Form: Understanding The Basics

The IRS 941 form is one of the most important documents for employers to submit. Filing this form on time will guarantee that your company is adhering to the necessary tax payment and employee wage guidelines.

Here’s a quick rundown of the IRS 941 form, including why it’s so important and how to complete it accurately.

What is a 941 form?

Form 941 is a document that employers use to report wages paid on a quarterly basis. It also includes details on employee reported tips and employment taxes, such as federal income tax, social security, and withheld Medicare taxes.

This form is important because it is accompanied by an employer’s social security, Medicare, and employee tax payments.

How do I fill out my IRS 941 form?

Normally, employment taxes are electronically deposited based on a bi-weekly or monthly schedule. This consistent reporting makes it much easier to fill out your IRS 941 form each period.

The form consists of five core parts, in addition to the employer information field at the top. The subsequent five parts are as follows:

Part 1:

In Part 1 you’ll add details like your employee compensation, how many employees you have, and what taxes you owe. Here you can state if you have already overpaid on employment taxes, or if you have a balance due to the IRS.

Part 2:

This section defines the tax deposit schedule which, as discussed, is usually monthly or semiweekly. You’ll need to include a breakdown of tax liability here, which is why it’s important to record your payments in detail.

Part 3:

This section asks two questions: whether the employer has stopped paying wages, and whether there are seasonal employees. In the latter example, a quarterly payment isn’t required.

Part 4:

This section allows an employer to designate a third party contact, like a CPA, to speak with the IRS if they need to. Contact details of the designee can be added here optionally.

Part 5:

The end of the form is reserved for the employer’s signature and date, stating that all wages and taxes reported are honest and accurate.

When must my 941 form be filed?

All 941 forms must be mailed or emailed by employers to the IRS on a quarterly basis. This means that they’re due on the 15th of April, June, September, and January. These due dates stay the same each year, so it’s important to mark them on your calendar and anticipate these deadlines to avoid any late filing.

What happens if I file my 941 form late?

If you don’t pay your estimated taxes by the due date, you are subjected to fines and fees. Specifically, the IRS will charge you a 5% penalty on the balance you owe for every month that your payment is late. This will continue for every month you’re late until the penalty reaches a maximum of 25%. Each additional week and month that you’re late, a 0.5% tax is also added to your total bill.

Do non-profits have to file a 941 form?

While non-profit organizations are tax exempt, they’re still expected to file the IRS form 941 on a quarterly basis. However, this is not the case if they are a small organization that owes less than $1,000 on their taxes. In this case, the company is eligible to pay taxes just once annually.