What Is Form 941? Facts and Filing Tips for Small Businesses
Form 941 is a Internal Revenue Service (IRS) tax form for employers in the U.S. It is filed quarterly. Employers use this form to report income taxes, social security tax or Medicare tax deducted from employee paychecks. Form 941 is also used to pay an employer’s part of Medicare tax or social security, according to the IRS.
In this article, we’ll cover:
- What Is Form 941?
- Who Needs to File Form 941?
- What Is Form 941 and When Must It Be Filed?
- How Do I File Form 941?
NOTE: FreshBooks Support team members are not certified income tax or accounting professionals and cannot provide advice in these areas, outside of supporting questions about FreshBooks. If you need income tax advice please contact an accountant in your area.
What Is Form 941?
Form 941 is an employer’s quarterly federal tax return. Employers in the U.S. regularly take certain amounts out of their employees’ paychecks for federal income tax, social security tax and Medicare tax.
This withheld money is reported to the government via Form 941, a tax form from the Internal Revenue Service (IRS). The form helps businesses figure out how much tax they owe.
Employers also need to pay their own share of Medicare tax or social security. This portion isn’t withheld from employees’ pay.
Who Needs to File Form 941?
Businesses typically need to file Form 941 if they have employees and withhold income tax, social security, and Medicare tax from their wages.
Specifically, they need to file form 941 to report the following payroll-related amounts. If any of these factors apply to your business, you need to file Form 941.
- Wages paid
- Tips reported to you by employees
- Federal income tax withheld
- Employer and employee share of social security and Medicare taxes
- Any additional Medicare Tax withheld from employees
- Current quarter adjustments to Medicare taxes and social security for sick pay, tips, group-term life insurance and fractions of cents
- Small business payroll tax credit
Form 941 shouldn’t be used to report withholding on non payroll payments such as:
- Gambling winnings
Use Form 945 to report these items.
The following employers don’t need to file Form 941:
- Seasonal employers. They don’t need to file Form 941 for any quarter where they haven’t paid their employees wages.
- Employers with household employees. Use Pub. 926 and Form 1040 (Schedule H) instead.
- Employers of farm employees. Use Form 943 and Pub. 51 instead.
Employers with less than $1,000 in employment taxes per year can file Form 944, instead. Form 944 is an employer’s annual federal tax return. Call the IRS at 1-800-829-4933 to request this change.
Selling your business? The new owners and you must both file Form 941 for the quarter when the transfer happened. You only need to report the wages you paid.
If you’re selling or closing the business for good, file a final return. You can do this by checking the box on line 17 of Form 941, write the date you last paid out wages, the name of the person that’s been keeping your payroll records and where your payroll records will be stored.
What Is Form 941 and When Must It Be Filed?
After you file your first Form 941, you are required to file a return for each quarter, even if you don’t have any payroll taxes to report. So, you need to file Form 941 every three months.
The due dates for Form 941 are as follows:
- April 30
- July 31
- October 31
- January 31
Each due date covers the three prior months. For example, when you file on January 31 you’ll be reporting amounts withheld on payroll from October 1 to December 31 of the previous year.
Paying your taxes falls on a different schedule. Look at the four 941 forms you filed between July 1 of the year before last to June 30 of last year.
If you reported less than $50,000, then you must make monthly deposits. If you reported more than that, you need to make deposits twice a week. Section 11 of Pub. 15 has more details.
Can’t pay? Use IRS.gov/OPA to set up an installment plan and avoid penalties.
How Do I File Form 941?
You can file Form 941 via mail or online.
Returns via mail must be addressed correctly, have enough postage and be postmarked by the U.S. Postal Service on (or before) the due date. See above for due dates. Send returns send by U.S. Postal Service to one of these listed addresses (varies based on state).
A private delivery service (PDS) will help ensure your return gets to the IRS on time. The IRS has a list of approved PDS. PDS deliveries should only be sent to one of these IRS addresses. Pick the one closest to you.
Payments must still be made electronically. Your options are listed below.
You can file Form 941 and make payments electronically, if you wish. E-file lets you file your form online. EFTPS is an government service that lets you make your payment online. You need to enroll first.
People also ask:
What Is a IRS Form 941?
IRS Form 941 is a tax form from the Internal Revenue Service. U.S. businesses with employees must use it to report federal income tax, social security tax and Medicare tax withheld from their employees’ pay. They then need to electronically send the amount withheld to the government.
Does Form 941 Have to Be Filed Electronically?
No, Form 941 does not have to be filed electronically. You can choose to file it via mail instead.
You should either file online or via mail, not both.
If filing via mail, you can file out the form on your computer and print it. Or you can print it and fill it out by hand. Further mailing instructions are above.
That said, you must deposit all funds owed to the IRS electronically, ideally via the EFTPS.gov service. You can ask your accountant or payroll manager to do this for you. Or you can ask your bank to do a same-day wire transfer. Instructions on how to do so can be found here.