The only thing scarier than a Halloween movie marathon is the idea of IRS penalties for your business. With the third quarter Form 941 deadline just a few weeks away, there is no escaping it.
Tackling Form 941 each quarter has become a daunting task for employers, as it is usually updated in some way by the IRS.
There is good news when it comes to the third quarter, there are no major changes to Form 941. There are however a few changes to consider when it comes to the worksheets you will need.
When it comes to choosing your filing method, filing electronically will simplify the process. Not only will the IRS receive and approve your 941 in a much shorter time frame, but there are great time-saving perks.
Before you begin Form 941, you will need to enter some basic employer information. If you haven’t filed for this business before you can enter the information manually. If you have this business in your address book already, you can click the drop-down and select it.
Form 941, Part I
Let’s get into the specifics of Part I. This is where you will enter various information related to your employees’ wages, tips, and other compensation and the amounts that you withheld. This part of the Form has not changed since last quarter.
You will also enter important information here regarding the COVID-19 tax credits that you claimed during the quarter. This includes the credit for qualified sick and family leave wages, the employee retention credit, and the COBRA premium assistance credit.
Please note that there is an adjustment to the 941 worksheets that employers are required to complete this quarter. Instead of using Worksheet 2 to calculate the employee retention credit, employers must use Worksheet 4.
As you can see in the screenshot below, TaxBandits is updated to include Worksheet 4, so you don’t have to worry about using the wrong worksheets!
Form 941, Part II
Part II of Form 941 is all about your deposit schedule. If your business operates on a semi-weekly deposit schedule, you will be required to complete Schedule B. There is no need to worry TaxBandits supports 941 Schedule B and semi-weekly depositors will be prompted to complete before continuing to part III.
Form 941 Part III
Only answer the questions in Part III that apply to your business. For example, you may not be a seasonal employer, or a recovery startup business, these questions don’t apply to you.
You will, however, need to enter some additional information about wages and expenses associated with your COVID-19 tax credits.
Form 941 Parts IV and V
Congratulations, you have basically completed Form 941 at this point! You made it through the most complicated portions and now it’s time to sign it.
You can easily e-sign your form using the Online Signature PIN that the IRS has assigned you, or you can use Form 8453-EMP. If you are a tax professional signing on behalf of your clients, you can send them a Form 8454-EMP and upload it once they have emailed it back to you.
Now all that’s left is to review your form and click the green button to transmit it to the IRS! We will send you instant updates on the status of your Form 941.
To see the entire e-filing process, check out this video:
Ready to get started? Pricing starts at just $4.95 per form!