A recent survey found that almost 33% of Americans don’t pay their taxes until the last minute. But that’s not a good idea as failing to meet the deadline could land you in big trouble.

The IRS takes filing taxes very seriously. For businesses, this means you should always fill out Form 941 on time. Otherwise, you could face penalties.

Need to know what information’s needed when completing the form? Read on to find out so you can keep your business in the clear.

What Is IRS Form 941?

IRS Form 941 is the better-known name for the Employer’s Quarterly Federal Tax Return. This is the form businesses use for reporting income and payroll taxes paid by employees.

While employees usually pay taxes only once each year, most businesses have to report them quarterly.

What Information Is Needed for Filing IRS Form 941?

Here’s what’s required when businesses fill out the form:

• Paid salaries or wages
• Any tips reported by employees
• Federal income tax that employees weren’t informed of
• Social Security and Medicare taxes (paid both by you and your employees)
• Small-business payroll tax for research-based pursuits
• Quarterly changes to Social Security and Medicare taxes for tips, sick pay, and group life insurance payments

Completing IRS Form 941 will show you how much you’ve paid (or are due to pay) for payroll taxes over the quarter.

While the Employee Retention Credit (ERC) was implemented in 2021, your business can file for it this year, too. You should consider this when completing Form 941. For more about ERC in 2022, head over to erctoday.com.

How to Fill Out IRS Form 941

There are five parts to be completed over three pages when filling out Form 941. A payment voucher can be included at the end if you choose to pay by mail.

Here’s your guide for all the details.

Collect All Information That’s Needed

Make sure you give yourself plenty of time to gather all the information. In addition to what we’ve mentioned, here’s what else you need to submit:

• Business address information
• Employee Identification Number (EIN)
• Number of employees

Fill Out the Business Information

At the top, you must fill out basic business information and the quarter you’re completing for. This will include your:

• EIN
• Name and trade name (if any)
• Business address

Complete Part 1

For Part 1, there are 15 lines with information to fill in. This includes:

• Wages paid and tips
• Federal income taxes withheld
• Taxable Social Security and Medicare wages

After, you must calculate your total employment tax liability. If any changes for sick pay, group life insurance, fractions of cents, and tips are related, these details should follow along with the total tax amount.

If you receive payroll tax credits, add this in and then calculate the total tax after credits.

Complete Part 2

In Part 2, you declare whether you schedule your deposits on a monthly or semiweekly basis.

If you deposit monthly, you should provide the information in the spaces provided for months 1, 2, and 3. If your tax liability exceeds $50,000 and you deposit semiweekly, also fill out Form 941 Schedule B and send both IRS forms.

Complete Parts 3, 4, and 5

For Part 3, you have to declare the following:

• If your business closed down
• You no longer pay wages
• You’re a seasonal employer

Part 4 involved declaring if a third-party representative has any further dealings with the IRS about the form.

Lastly, in Part 5 you sign and date Form 941.

Learn More About How to Succeed in Business

Keeping your tax documents up to speed is always important to ensure your business stays smooth. So make sure not to neglect Form 941 and always fill it out on time.

For more business tips, check out our other blog posts. See what else is trending today!