Thursday, October 30, 2008

Employer's Quarterly Tax Return, 941

I answer a lot of questions surrounding the IRS form 941. This is the employer's quarterly tax return.

The 941 needs to be filed each quarter. It is due on the last day of the month following the quarter end. The due dates are April 30, July 31, October 31 and January 31.

Deposits for most companies are made each month for employees withholding and matching FICA. The 941 reconciles all deposits made during the quarter to what is owed.

Most companies fall into trouble when they stop making their deposits thinking that they can "catch up" next month. Once you fail to make one deposit, it becomes a snowball effect and you end up owing the IRS a lot more than just your regular deposits.

One way to avoid this is to hire a payroll tax company which will figure your paychecks for you, process the checks for distribution to your employees, make your deposits and file your 941. It is a good idea. It may cast you some extra coin, but it keeps you out of trouble with the IRS. Besides having them do your payroll gives you more time to spend in your business doing more important things that can move your business forward, like being able to do more sales.

If you end up owing for more than 3 quarters will land you with a Revenue Officer of the IRS. And that is a bad deal.

If you need help with resolving an IRS issue please call a firm who knows how to take care of you.

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