What You Need to Complete Form 941
How to Calculate Federal Withholdings
The second quarter filing deadline for Form 941 is just a few weeks away. By now you know what Form 941 is from our previous blog post, Everything Business Owners Need to Know About 941 Forms. Here we will focus on understanding the many components needed to file.
First, we will focus on Federal tax withholding. This is the amount of tax that is taken out of each paycheck. This amount builds up over the course of the year and the amount of withholds is applied to you and your employee’s taxes due. If you withheld more than needed, you will receive a tax refund. However, if enough was not withheld, then you will owe additional taxes.
What You Will Need:
- Payroll Period (Weekly, bi-weekly, semi-monthly, or monthly)
- Gross pay for the period
- Employee’s marital status
- Number of exemptions claimed by the employee
- Any additional amount employee wants to be withheld
Once you have the required information, you are ready to begin e-filing your quarterly 941 Form. For the purpose of this, we will focus on a semi-monthly pay structure. Follow these four steps to determine the correct federal tax withholding for your quarterly 941 filing.
Step 1:
Determine value of total withholding allowances (exemptions) as claimed on most current W-4 Forms by multiplying each allowance by the semi-monthly amount of $168.00
Step 2:
Add amount of all salary reductions, such as retirement plans or health insurance
Step 3:
Total the amounts from steps 1 & 2 and subtract from this total the semi-month pay. This will give you the total taxable gross wage
Step 4:
In the chart below, find the correct marital status and taxable pay. This will give you the correct federal tax withholding
Semi-Monthly Payroll Period
| Single Person | Married Person | ||||||
| The Taxable Wage: | Income to be Withheld: | The Taxable Wage: | Income to be Withheld: | ||||
| Over: | Under: | %Of Withholding | $Amount: |
Over:
|
Under: | %Of Withholding | $Amount: |
|
$0
|
$96
|
0%
|
0
|
$0
|
$360
|
0%
|
$0
|
|
$96
|
$484
|
10%
|
$9.60
|
$360
|
$1,138
|
10%
|
$36.00
|
|
$484
|
$1,677
|
15%
|
$33.80
|
$1,138
|
$3,523
|
15%
|
$92.90
|
|
$1,677
|
$3,925
|
25%
|
$201.50
|
$3,523
|
$6,740
|
25%
|
$445.20
|
|
$3,925
|
$8,081
|
28%
|
$319.25
|
$6,740
|
$10,083
|
28%
|
$647.40
|
|
$8,081
|
$17,458
|
33%
|
$723.30
|
$10,083
|
$17,732
|
33%
|
$1,151.55
|
|
$17,458
|
$17,529
|
35%
|
$1,072.46
|
$17,723
|
$19,973
|
35%
|
$1,506.01
|
|
$17,529
|
Above
|
39.6%
|
$1,878.79
|
$19,973
|
Above
|
39.6%
|
$2,424.77
|
How to Calculate Social Security and Medicare Taxes:
- Social Security:
- 6.2% is what you will take from the employee’s taxable income.
- You the employer will also need to pay in 6.2%
- If you are self-employed, you will need to pay both the employer and the employee tax: 12.4%
- If you earn more than $118,000 you don’t have to pay Social Security on income over this amount.
- Medicare Tax:
- 1.45% is the employee portion; again, the employer must match that and pay 1.45%
- If you are self-employed, you pay both portions: 2.9%
- If you are a high earner, you must pay an additional 0.9%
- $250,000 for Married and filing jointly
- $200,000 for Single, Head of Household, or Qualifying Widow(er)
- $125,000 for Married filing separately
We understand that all of the payroll tax information can be confusing, especially under pressure. We at ExpressTaxFilings take pride in being IRS-authorized to provide you with a safe, secure, and accurate e-file process that will save you time and money.
If you have any questions about e-filing your Form 941 with ExpressTaxFilings, we’re available by phone, live chat, and email to help! Our US-based customer support team will be happy to answer any questions that may come up in your e-filing.
