In addition to the myriad of other things you have to keep track of while running a small business, you have to make sure you are paying attention to the required tax forms and submissions. Small business are required to fill out and submit the forms related to withholdings and payroll taxes including the 940, 941 and 944 forms. Below are further details about these forms.
940 Form is specifically designed to report the amount of unemployment tax each small business is submitting for their employees. Many small business based on the amount of payroll they are paying bi-weekly are actually required to deposit funds with the IRS on a regular basis however those with smaller amounts are to submit by January of the following year along with the Form 940. This form will include each employees withholdings and social.
Use of the 941 Form is for quarterly reporting of the withheld social security taxes, income taxes, medicare amounts as well as other adjustments that have been withheld from their checks. This form is to be submitted along with payment due from each small business.
While form 944 is very similar to form 941, there are a few differences. Employers who file a 944 and whose liability is $2,500 or more for the calendar year, you're allowed to pay the fourth quarter employment tax with the return, as long as all previous three quarters were deposited correctly.
While the IRS does have some leniency on deposits and submissions, when amounts reach a certain threshold you are required to make immediate payment. If the amount being held by the company reaches $100k or more then you are required to use bi-weekly deposits. Generally if reporting less than $50k in a year it will be deposited monthly.
When preparing your 940 Form you need to make sure that you are accounting for any applicable discount or credit that you may be eligible. Some states have separate withholdings that you need to file and many of these fees can be deducted from your federal return.
While the forms in general are straightforward, you need to make sure you are using the correct forms. There are specific forms for Puerto Rico and the island territories including Samoa and the US Virgin Islands.
There are a number of items to keep track of when successfully running a small business and tax filing is not an easy one. There are a number of options online to file your taxes either by yourself or with the expertise of a tax accountant. Regardless it's important to ensure you are filing and paying the IRS timely.
Get started now and file your 940 Form online now. For more articles or details about the 941 forms or filings click here for the form 940 instructions
