IRS form 941 is how employers pay their portion of social security and medicare tax for their employees. Since as an employer you are already withholding the employees’ shares from their paychecks, failure to file form 941 and send the money to the IRS on their behalf is a very serious mistake. If you withhold from paychecks but don’t send the money to the IRS you are pretty much just plain stealing from everyone.
Now that I’ve scared you, let’s make sure you know how to properly file IRS form 941.
Where to Get IRS Form 941
Form 941 is a one-page form and unless you want to pay a company that’s authorized by the IRS to do so, you can’t file it online. Best way to file IRS form 941 is go to the IRS website and download the form in PDF format. Fill it out on your computer using a PDF program, then print it out and mail it to the correct address. Click on that link just above to go directly to the form.
The IRS used to mail all businesses fat envelope containing Form 941 and all its instructions. This happened four times a year, before the form was due. It was a huge amount of paper but some business owners liked it because it came with pre-filled information on it, like your business name, address, and Employer Identification Number (EIN).
But seriously, what a colossal waste of paper. They stopped doing this in 2011, the trees say thank you. Now like I said above, you can download IRS form 941 from the IRS website.
Do You Have to File IRS Form 941?
If you have employees and you pay them wages then yes, you must file form 941. This includes household employees, for whom you must calculate withholding to cover their social security and medicare taxes. Form 941 is also used to report your employees’ tips to the IRS.
So, the withholding covers the employee’s share of medicare and social security taxes. When they file their federal income tax return they may get some of that withholding back, in the form of an IRS refund.
You as the employer must report that withholding amount on form 941, and you must also fork it over to the IRS every three months. In addition, you must also pay your half of each employee’s Social Security and Medicare tax. As an employer, that’s just how it works.
This is not a form you want to fool around with- get it right and get it in on time.
How do I Pay What I Owe?
Here, businesses get divided into two categories: those who must make a Federal Deposit and those who just pay with the form 941. If what you end up owing on the current quarter’s IRS Form 941 is less than $2,500, you can simply pay by check and send it along with the form.
But if your business is big enough so that you owe more than $2500, you must make what the IRS calls a deposit. This means you have to electronically submit a chunk of money ahead of time, using EFTPS. It basically sets up your business to keep money flowing into the IRS automatically and regularly so you don’t miss payments.
EFTPS stands for Electronic Federal Tax Payment System. Its an electronic funds transfer and it’s a free system set up to make sending money to the IRS fast and easy. You have to register and create a PIN and this takes time so enroll and set it up in advance of a form 941 payment due date.