Having employees can be rewarding, yet it comes with huge responsibilities. One crucial responsibility is filing taxes and reporting the necessary withholdings on tax forms. Employers deduct tax withholdings, Social Security contributions, and Medicare deductions from their employees’ paychecks. When they do this quarterly, they use Form 941 (Employer's Quarterly Tax Return).
You want to ensure the details are correct when filling out this form. Errors or deliberate misinformation could lead to severe punishments for you and the employee. As a business, it's important to know what this form is and why it's required. You may need to partner with experts like Skuad to complete this crucial process hassle-free.
Explore this article to discover what a 941 form is, who should file it, how to file it, and the processes involved.
Who files Form 941?
Any individual or company that hires, pays and makes tax deductions for employees must file 941. They will report each quarter's withholdings, such as Social Security and Medicare contributions.
One platform to grow your global team
Hire and pay talent globally, the hassle -free way with SkuadTalk to an expert
What information is contained in Form 941?
When conducting a 941 tax filing, you will report all the withholdings on their salaries. Further, the form will contain the following information:
- Withheld federal income taxes
- Tips recorded by your employees
- Wages you paid to your staff
- The employer's ID number, including Tax Identification Number (TIN), Social Security Number (SSN), and Employer Identification Number (EIN)
- Employee and employer's social security and Medicare contribution taxes
- Social Security and Medicare quarterly adjustments
- Payroll tax credit for small companies pertaining to research activities
What does Form 941 look like?
If you’ve ever filled out a form from the IRS, you will find the 941 tax form simple to navigate. Like other tax forms, its sections also have brief descriptions for clarity.
You must fill out tables with different information — like employee identification number (also called EIN or tax identification number), number of employees, and more in the 941 quarterly reports.
You can download Form 941 from the IRS official website.
Employer information section
As the employer, you will fill out the employer information section with your 941 quarterly reports. You must add your correct information, including name, address, social security number, and employer identification number (EIN).
Fill in the number of employees on your payroll for the quarter. Include wages, bonuses, or tips you paid them with information on federal income taxes you withheld from their salaries. This includes all employees — whether they work in the same office as you or are digital nomads.
Determine your tax obligations and arrive at the total amount. Finally, calculate your total due amount by deducting your payments from your total taxes.
This section lets you know how frequently you will report taxes calculated, including the 941 employer tax.
This is where you will indicate if you have seasonal workers or full-time employees. You may stop paying taxes temporarily if you have seasonal employees.
You give authorization to a third party, usually an expert, to send the form to the IRS. This portion is optional.
Complete the form by signing it with the accurate date.
What is IRS Form 941 Schedule B?
The form's IRS 941 Schedule B section is where semiweekly depositors report their quarterly tax liability. If this portion applies to you, don't report your deposits.
When you need to fill out Form 941
As an employer, you must fill out the 941 form after every quarter. The quarterly deadline for completing this form is the last day of the new month, following the end of a quarter.
For example, you would file for Quarter 1 (January 1 to March 31) by April 30.
Can I file Form 941 online?
You can file your tax forms online if you don't want to mail them to the IRS. E-filing your 941 saves you time, is secure, and you can get it back quickly if there are any errors. You will need an Online Signature PIN to complete this form to show authorization. The IRS also recommends e-filing.
The process involved in submitting Form 941
Follow this process to complete Form 941 correctly:
Collation of necessary information
Gather all the crucial information you need to fill out the form. Proper record-keeping will make this process easier. The information you need includes the following:
- The number of employees you currently have
- Your full name
- Wages you paid employees in the quarter
- Medicare and social security deduction taxes for the quarter
- Other tax deposits for the quarter
Filing period statement
The 941 form contains a section for the filing periods or quarters. Before filling out the form, you must indicate which quarter you are filing for. Check the box next to the quarter you are filing for to select your filing period.
Filling the form
When you have all the information, ensure you fill out the form correctly. The document is self-explanatory and easy to fill out. Complete all parts from 1 to 5, and sign on the last page with the current date.
Filing Form 941 online or in-person
You have two main options to file form 941: in-person or online. There are pros and cons to each. However, filing the 941 tax form online would be quicker and easier. Once you choose your preferred option, fill out the form on the IRS official website or the designated address closest to you.
Make necessary payments
You can either make your tax payments online or through the mail. If you are paying online, you can use EFTPS for your e-payments. Send the payment along with your voucher to the IRS if you want to pay via mail.
How Skuad can help you with Form 941
The 941 form enables employers to report amounts withheld from an employee’s paycheck. It helps ensure transparency and is crucial for managing taxes for an international remote team. Skilled employees can be instrumental when building a remote team. How you handle their taxes is crucial to complying with labor and tax laws.
Working with international hiring platforms like Skuad can help you guarantee compliance while navigating employee taxes. Skuad currently supports employers in over 160 countries with their employee management needs.
Our unified platform enables you to onboard, manage, and pay your global employees seamlessly — whether they're on-staff or independent contractors. Speak to a Skuad expert today to start global hiring with a solid foundation for employee tax management.
Frequently Asked Questions about Form 941
What is Form 941 used for, and when must it be filed?
A 941 form reports all mandatory deductions from an employee's paycheck. These deductions include Medicare, Social Security, and other income taxes. Employers will also use this form to report their own share of Medicare and Social Security contributions.
You must file this form at the end of the month following the end of a quarter. To illustrate, here are the dates for filing a 941 for each quarter:
- April 30: January 1 – March 31 (first quarter)
- July 31: April 1 – June 30 (second quarter)
- October 31: July 1 – September 30 (third quarter)
- January 31: October 1 – December 31 (fourth quarter)
Who needs to fill out Form 941?
Individuals or organizations that pay employees and withhold certain taxes need to fill out the 941 form. In other words, if you have at least one person on your payroll and deduct Medicare, Social Security, and other tax incomes from their salary, it is essential to complete this form every quarter.
You must also complete this form if you have more than $1,000 in your yearly tax liability.
Do I have to file a 941 if I have no payroll?
If you have no employee(s) to pay within a quarter, you don’t have to file an IRS form 941. If you don’t pay workers during a quarter, it implies that you have zero tax liability.
Examples of employers who do not need to file this form include seasonal employers, household employers, and farmers.
What happens if you don't file Form 941?
Failure to file form 941 before the deadline typically involves penalties, usually fines. You will incur a fine of 5% of the tax due. The fine may increase up to 25% of the tax due but won’t exceed that rate. If you still fail to pay taxes, your penalty will incur interest until you pay the balance.