If you’ve been running your own small business, you’ve probably learned that there’s a lot of paperwork involved! Small businesses that have employees face certain challenges compared to those without. Employers need to pay an employment tax. When it comes to paying employment tax, you must be sure you are using the correct forms.
There is a form for both quarterly and annual tax returns for employers. These forms are unique and thus not interchangeable. Small business owners must file them in accordance with their designated filing requirement.
Form 941 – Employer’s Quarterly Federal Tax Return
Use this form to report any income taxes, social security taxes, or Medicare taxes that have been withheld from your employees’ checks, as well as the employer’s portion of the social security and Medicare taxes. Payment of both the employee and the employer payroll taxes are also reported. Fill this form out and submit it quarterly.
If you’d like to read more about Form 941, click this link to the IRS’s website page dedicated to the Employer’s Quarterly Federal Tax Return.
Form 944 – Employer’s Annual Federal Tax Return
Are you an employer that owes less than $1,000 in social security taxes, income taxes, and Medicaid taxes annually? To help save you time and give you flexibility, you can file the Employer’s Annual Federal Tax Return once a year. This is an ideal option for the smallest businesses who often do not have time or resources to do this quarterly.
If you’d like to read more about Form 944, click this link to the IRS’s website page on the Employer’s Annual Federal Tax Return.
In addition to these forms, all states have their own set of rules and forms related to reporting wages. Florida, for instance, has the FL Re-employment form (RT-6) that must be submitted each quarter. Each employer must report their own payroll, unless they are an employee leasing company or have been approved as a Common Paymaster. The penalty for filing an erroneous, incomplete, or insufficient report (which includes an inaccurate SSN) can be steep.
It is important to file the correct forms to avoid penalties and fees! Unsure of which form to use for your small business, or when to file? Contact Elevate Accounting Solutions! We can help you weigh your options and make the best decisions for your needs.