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The Curious Bag
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Federal law requires that employers withhold certain taxes from their employees' payroll checks and make corresponding deposits to the Internal Revenue Service (IRS). Employers also are required to make federal deposits to cover their portion of employees' tax.
Features
On Form 941, employers account for wages, Medicare tax, Social Security tax, tips, federal income tax, advanced earned income tax credit (EIC), and Consolidated Omnibus Budget Reconciliation Act (COBRA) payments made to or on behalf of employees.
Significance
Employers must file Form 941 on a quarterly basis. The due dates are April 30, July 31, October 31 and January 31.
Considerations
Employers report non-payroll withholdings---such as 401(k) contributions or pensions---on Form 945 (see Resources).
Warning
You will be subject to an IRS penalty if you do not file Form 941 by the due dates. In addition, you risk a Failure to Deposit (FTD) penalty if you do not make the necessary tax and withholding deposits as required. Form 941-X is for corrections to a previously filed Form 941.
Exceptions
Exceptions apply to employers of seasonal, household and farm workers. Consult IRS Circular E for additional information (see Resources).
Source:
Resource:
IRS Form 941
IRS Circular E
IRS Form 945
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