If you run a business, you need to know about the following forms.
Form W-2
Employers must complete a Form W-2 for each employee. These wages and taxes are
reported annually on the W-2. However, W-2s aren’t filed directly with the IRS.
Instead, employers file W-2s with the Social Security Administration (typically
by Jan. 31), which sends the information to the IRS.
Form W-3
Form W-3 is a transmittal form that is sent with W-2 forms. It shows the total
number of W-2 forms being transmitted along with the total federal wages,
Social Security wages, Medicare wages and federal withholding taxes for all
employees. The figures shown on the W-3 must reconcile with the collective W-2
amounts.
Form 941
Generally, employers must file Form 941, Employer’s Quarterly Federal Tax
Return, on a quarterly basis with the IRS. The form is used to report wages
paid to employees; federal income tax, Social Security tax, and Medicare tax
withheld from those wages; and your own portion of Social Security and Medicare
taxes for the reporting quarter. The IRS matches your 941 forms with the totals
on your Form W-3 to determine the accuracy of your filings.
Form 941s are due by the last day of the month that comes after the end of the quarter.
Form 944
Some small employers with annual employment tax liability of $1,000 or less may
be able to file annually instead of quarterly. In order to file annually, the
employer must receive approval from the IRS. Typically, employers that have
obtained this approval to file annually must report their taxes by Jan. 31, on
Form 944, Employer’s Annual Federal Tax Return.
If your employment tax liability eventually exceeds the $1,000 threshold, do not file the quarterly Form 941 until the IRS tells you that your filing requirement has switched to Form 941.
Form 940
Most employers must pay and report federal unemployment tax, also called FUTA
tax, to the IRS. Only the employer pays FUTA tax, which must be filed annually
on Form 940, Employer’s Annual Federal Unemployment (FUTA) Tax Return, by Jan.
31.
Form W-4
Although you’re not required to file Form W-4, Employee’s Withholding Allowance
Certificate, with the IRS, we’re mentioning it because of the central role that
it plays in employment tax filing. Each of your employees must complete a W-4
form, which is used to determine their federal income tax withholding. (Federal
income tax withholding inexorably impacts your Form 941/Form 944 filings and
your W-2/W-3 filings.) Also, the Form W-4 may be radically redesigned for 2020,
so keep an eye open for the new version.
Also, in some cases, the IRS requires that employers submit copies of employees’ W-4s to ensure enough federal income tax is being withheld.©
Recent Comments