The IRS requires businesses of all sizes to make 941 payments according to a regular schedule. 941 payments are necessary for any business that has listed employees, including the owner, so that the various employment taxes can be accounted for without repercussions. Most 941 payments include income tax withholdings, social security, and Medicare/FICA. Businesses must account for these payments for anyone on the payroll who is not a contractor or unpaid intern.
Breaking Down 941 Payments
The 941 payments form can be broken down into six basic parts for employers. The first part is relatively simple, and asks for the employer’s identification information and which quarter the form is being filed for. The second section is the most essential, because employers need to list the number of employees, the amount they earn, and the taxes owed. The numbers listed in this section will help determine if your business owes taxes or if you have overpaid, which can be applied to the next quarter. The third section lists a tax deposit schedule, so employers do not have to make a one lump payment to the IRS that can place a severe strain on finances. The fourth part is rather simple, because it just asks if you’ve closed your business or stopped paying wages to your employees. Part five gives you the option of putting the IRS in contact with a CPA, if you have a professional accountant handle your 941 payments. The last part is the easiest, just because it’s the line for the signature.
941 Payment Schedules
Filing 941 payments is fairly easy, because the schedule goes by quarters. Business owners must adhere to the following schedule, or else file for extensions:
Quarter 1: January to March
Quarter 2: April to June
Quarter 3: July to September
Quarter 4: October to December
Follow Up with Your Accountant
Whether you are taking care of the accounting side for your business, or you use a CPA, 941 forms must be filed and paid every quarter to avoid fines and fees. However, some 941 payments can easily fall by the wayside, if businesses aren’t careful. Make sure to meet with your accountant every quarter to make sure your business is on track with your 941 payments.