Understanding Form 941 Penalties: A Comprehensive Guide for Employers

How late filing and potential IRS penalties could affect your business.

Stephanie Glanville | August 2, 2023 | Read time: 4 minute(s) | Form 94x Series, Penalties | No Comments

July flew by and so did the deadline to file Form 941 for the second quarter of the 2023 tax year. So, if your business was required to file, and you didn’t – now what?

When it comes to late filing, what can your business expect? This is exactly what we’ll be covering in this blog.

Here are the potential penalties your business might face, and of course, some tips for getting back on track with your IRS filing requirements.

When is the deadline to file Quarterly Form 941?

The deadline for businesses to file their Form 941 is generally the last day of the month following the end of the quarter. For example, the deadline for the second quarter of 2023, which began on February 1st and ended on April 30th, would be July 31st. This is the last day of the month following April.

Following that same rule, here are the IRS 941 deadlines for the next two quarters of 2023:

October 31, 2023 – Third quarter deadline
January 31, 2024 – Fourth quarter deadline

What are the potential IRS penalties for late filing?

Here are the penalties that the IRS has laid out.

For every month that a business is late filing its Form 941 to the IRS, you will incur a penalty totaling 5% of your balance due to the IRS. You will continue to incur this 941 penalty every month for up to 5 months or 25% of your total balance due.

After this point, if your business has still failed to file you will be charged 5% of the tax payment owed to the IRS. This will increase to 1% of your total balance ten days after you receive a notice of levy from the IRS.

What about failing to make IRS Deposits on time?

The IRS also has the ability to levy a penalty in regard to deposits that your business made late or failed to deposit properly by their due date. The IRS could potentially penalize your business 10% of the deposit amount for each payment that was not made properly.

941 Filing Requirements – What are the next steps?

If you’ve missed your deadline for the second quarter, it’s certainly not too late to file. In actuality, you must still file your form with the IRS. As you can see, the IRS can increase penalties depending on how much longer you wait to file.

With TaxBandits, you can complete the filing process easily and accurately. Simply gather the information required on Form 941 (wages paid, taxes withheld, basic business information, etc), then take advantage of these time-saving features from TaxBandits:

Built-in IRS error checks
Zero Filing Feature – speeds up the filing process if your business has no wages to report for the quarter.
Prepaid credits – save money on your quarterly filing and save time at checkout by applying for a credit instead of entering credit card information.
Easy E-signature options – e-sign your form using your IRS-issued 94x Online Signature PIN or Form 8453-EMP.

Ready to get caught up on your quarterly Form 941 filing requirements? Don’t wait, start filing with TaxBandits today.