While filing the Form 941 each quarter used to be standard procedure for most employers, over the past year there have been many changes to this form. While employers are appreciative of the COVID-19 tax credits that have helped keep their businesses moving through the pandemic, reporting them accurately on the 941 has been an adjustment.
The second quarter of 2021 has wrapped up and business owners must be prepared to file their Form 941 with the IRS by August 2, 2021. Since this is only two weeks away, you may be feeling the pressure of this upcoming deadline.
Here are some helpful tips that we have been sharing with our clients this quarter to help them file their 941 easily and accurately.
Give yourself enough time to file
This may seem obvious, but that doesn’t make it any less true! Even if you felt that completing the 941 last quarter was a breeze, don’t save this quarter’s filing for the last minute. There are so many changes and updates in Form 941 for the new quarter.
These will definitely take some time to get familiar with. For perspective, there are 4 new worksheets that employers may need to calculate the refundable and nonrefundable portions of COVID-19 tax credits and over 23 fields of the form have been affected.
Take your time, complete the worksheets that correspond to the credits your business claimed during the quarter, and use these calculations to complete the 941.
When you e-file with TaxBandits, you can take advantage of so many features to simplify your filing process. For example, if your business hasn’t paid any wages to employees during the quarter, you can use the Zero Filing feature, this allows you to skip through to the end of the form. We fill in the zeros where needed, then all you have to do is review your form and transmit it!
All of the worksheets are built-in to the e-filing process, so you can easily figure out which worksheets you need to use, and complete them. TaxBandits provides automatic calculations, so you can ditch your calculator and save your mental math for another day!
How to address Overpayments on Line 15
So you may be thinking, line 15? What about it? Well; this is actually one of our most common questions when it comes to the Form 941, mainly when it comes to requesting a refund for the business’ overpayment.
Many employers are unsure how the IRS will provide this refund if they request one, the answer is by check. You also have the option to request a refund from the IRS, they also offer to apply the overpayment to your next return.
Balancing Schedule B
Semi-weekly depositors are required to file Schedule B and attach it to the Form 941. Employers qualify as a semi-weekly depositor under the following conditions:
The value on line 12 of the 941 is $2,500 or more
The business incurred a $100,00 next-day deposit during the quarter
As you can see, the amount on line 12 is a key component of Schedule B. It is very important to keep in mind that the total liability for the quarter on Schedule B must equal the amount on line 12 of the 941. This amount is the total taxes after adjustments and nonrefundable credits.
When completing Schedule B, employers must take into account all of the nonrefundable portions of tax credits for the quarter. Employers can reduce their tax liability according to their tax credits. When it comes to refundable credits, this amount should not be used to reduce the tax liability.
Don’t worry, TaxBandits supports the 941 Schedule B!
We hope you find these tips helpful when filing this quarter! Ready to begin e-filing with TaxBandits?