Form 941, Employer's Quarterly Federal Tax Return, is used by businesses who file their taxes on a quarterly basis. It reports information related to certain withholdings: income tax, social security tax, and Medicare tax. Because this is a quarterly tax return, the business must complete it at the end of every quarter.
A Form 941 will be used by employers in order to report certain taxes related withheld income tax, social security tax, or Medicare tax. It is known as an Employer’s Quarterly Federal Tax Return and will be reported to the United States Internal Revenue Service. The form must be completed for each quarter of the tax year.
The filer will need to have detailed information about their company or business. This includes the employer identification number. They will need to include how many employees work for the employer, what their wages are, and how much income tax, social security tax, and Medicare tax is withheld. This financial information will be used to calculate the tax overpayment or the balance due.
IRS Form 941 is commonly used if you are a business owner and have employees working for you. As an employer, you are responsible for withholding federal income tax and other payroll taxes from each employee’s paycheck and sending it to the IRS each quarter.
A Form 941 contains the following sections:
To complete a Form 941, you need to provide the following information:
If you fail to file Form 941 on time, it may result in a penalty of 5 percent of the tax due with that return for each month or part of a month the return is late. The maximum penalty is 25 percent. A separate penalty applies for making tax payments late or paying less than is owed. The IRS will penalize you 2 to 15 percent of your underpayment, depending on how late you are paying the correct amount.
If you’ve been paying employees and withholding federal income taxes and Social Security/Medicare taxes, you need to report those amounts and submit those payments to the IRS.
Form 941 may be submitted electronically through federal e-file. You can e-file Form 941 and pay any balance that is due using tax preparation software or working with a tax professional.
You must make monthly or semi-weekly deposits of payroll taxes collected. Do not wait until you file Form 941 to pay your taxes for the quarter. If you are required to make deposits and wait to pay the taxes with Form 941, you may be subject to a penalty for late payment.
Form 941 is due on a quarterly basis at the end of the month following the end of the quarter. For example, for the first quarter of the year, Form 941 is due on April 30.
