Form 941, the Employer’s Quarterly Tax Form, is used by employers to report the federal withholdings from most types of employees. It notifies the IRS of a number of important figures like the employment taxes taken from employee pay and the amount owed to the IRS.
In general, if you withhold taxes from your employee’s payroll then you will need to fill out a 941.
Since inDinero does not handle payroll, your team will generally direct you to consult whoever provides that service for you. However, we want to make this as easy for you as possible so we compiled a list of helpful facts as well as how to handle your annual CP136 notice from the IRS.
- After you file your first Form 941, you must file a return for each quarter, even if you have no taxes to report, unless you filed a final return or one of the exceptions listed next applies.
- Your Form 941 is due by the last day of the month that follows the end of the quarter.
- There are six different addresses where the IRS accepts this filing and/or payments depending on your company's location.
- Payroll providers like Gusto typically handle these filings quarterly on behalf of their clients.
- You will need to collect the following information:
- Wages you have paid
- Tips your employees reported to you
- Federal income tax you withheld
- Both the employer's and the employee's share of social security and Medicare taxes
- Additional Medicare Tax withheld from employees
- Current quarter's adjustments to social security and Medicare taxes for fractions of cents, sick pay, tips, and group-term life insurance
IRS Notice CP136
IRS uses Notice CP136 to explain your federal employment tax deposit schedule. They base your deposit requirement on the total tax you reported on your Forms 941 for the four previous consecutive quarterly periods, or the lookback period. It looks like this:
Once you find out your deposit schedule (in this example, semi-weekly), you can update your payroll provider.
For example, if you use Gusto then you'd follow these directions:
- Log into your Gusto account and navigate to the Company menu.
- Scroll down to the Federal Tax Setup section.
- You can confirm the existing schedule is accurate, or select Schedule a future change from the edit menu.
Our comments may not contain a full description of all the facts or a complete exposition and analysis of all relevant authorities. Furthermore, the use of certain words such as “should, would, or will” is merely for grammatical convenience, is not intended to indicate a specific level of authority regarding a particular issue, and no explicit or implicit references should be taken there from. Our comments expressed herein are based upon the provisions of the Internal Revenue Code and Regulations in force on the date hereof, all proposed amendments to these Acts, Regulations and treaties publicly announced by the relevant authorities. Each and all of these authorities are subject to change at any time. Any such change could be given retroactive effect with respect to the transactions described herein and could cause the conclusions provided to become invalid, in whole or in part, with respect to any entity involved. There can be no assurance that these authorities will not disagree with, or challenge, the views set forth in this memorandum or that any such challenge will be unsuccessful.