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Accounting Information > IRS Tax Forms > Form 941 Employer’s Quarterly Federal Tax Return

Form 941 - Employer’s Quarterly Federal Tax Return

            Throughout the year, employers withhold federal income tax, social security tax, and Medicare tax, from their employees’ wages.  The employers also have to pay a matching amount for the social security and Medicare taxes.  Form 941, Employer’s Quarterly Federal Tax Return, is used to report these taxes.  Also reported on Form 941 is the amount of wages paid to your employees, tips received by your employees, federal income tax that was withheld, and any advance earned income credit payments. 

             After you file one Form 941, you are required to file a return for every quarter, even when you have nothing to report.  There are only a few ways you can avoid filing a return.  One way is to file a final return stating that you will no longer be paying wages.  Also, seasonal employers are not required to file returns for any quarters in which they did not pay any wages.  Employers with only household employees normally do not file Form 941, since the wages they pay and the related taxes are usually reported on Schedule H, Household Employment Taxes.  Employers with only farm employees usually file Form 943, Employer’s Annual Tax Return for Agricultural Employees, rather than filing Form 941.


             An employer may need to make regular federal tax deposits. The frequency of your required deposits is based on your total tax liability for the previous four quarters.  This is called the look-back period.  Your deposit schedule is determined right before the beginning of the calendar year.  A monthly schedule depositor is an employer with no more than $50,000 in taxes for the look-back period.  A semiweekly schedule depositor would be an employer with more than $50,000 in taxes during the look-back period. 

             Whether or not an employer is required to make a deposit is also dependent on the total of taxes withheld and the employer portion of the social security and Medicare taxes.  If the total amount, after being adjusted for advance EIC, if any, is less than $2,500 for the quarter, a deposit is not required.  The employer can simply pay the full amount of taxes when filing their Form 941.  When the employer is not certain that their total taxes will not exceed $2,500 for the quarter, it is advisable to make a deposit to be safe.  If the total taxes for an employer exceed $2,500 for the quarter, the deposit must be made using the Electronic Federal Tax Payment System (EFTPS), or making a deposit at an authorized financial institution using Form 8109, the Federal Tax Deposit Coupon.

             After the end of the year, employers are required to report wage and tax information on Forms W-2 for their employees.  The totals of all W-2s for an employer are reported on Form W-3, Transmittal of Wage and Tax Statements.  The amounts reported on Form W-3 are matched by the IRS with the reported amounts from the employer’s four quarterly Forms 941.  The amounts reconciled are federal income tax withholding, social security wages, social security tips, Medicare wages and tips, and advance EIC payments.  If any discrepancies are found, the employer will be notified by the IRS or the Social Security Administration.

             If you need help with figuring out your income taxes or employment taxes, then you are in the right place.  Try out the CPA search feature on this website to find a qualified professional in your area to assist you with all your tax and accounting needs.

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