Understanding How to File and Correct the 941 Employment Tax Form



Small business owners have the unique obligation to report and pay their taxes quarterly. While the IRS wants this process to be relatively straightforward and simple, you still may be confused about what is actually expected of you at the end of every quarter. You can learn how to file the 941 employment tax form and avoid expensive fines and penalties by keeping these tips in mind.

What is the 941 Employment Tax Form?

Business owners who hire and retain employees must file the 941 employment tax form every quarter. This form allows you to report the number of employees who work for your business. It also should reflect the total wages and the amount of taxes that you are paying for your employees.

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Some of the most common taxes that you should report on this form include:

  • Social Security taxes
  • Medicare
  • Federal income tax
  • Federal unemployment tax
As noted, you must file this form if you hire and keep employees for your business. It is required even if your employees consist of your immediate family members or your spouse or if you temporarily lay off workers during one or more of the yearly quarters.

You are exempt from filing the 941 employment tax form if your business:

  • Employs seasonal workers
  • Does not pay seasonal wages during one or more quarter per year
  • Employs household employees
  • Employs farm workers
You can find the 941 employment tax form online at IRS.gov.

Common 941 Employment Tax Form Mistakes

Despite the form's seemingly straightforward and self-explanatory appearance, it is still possible for you to make simple yet common mistakes when filling it out and submitting it. One of the most common errors that small business owners make when completing the form involves miscalculating the taxes or wages that they paid. A simple mathematical error can alter the true amount of taxes that you must pay and cause you to incur penalties and fines from the IRS.

The IRS also may penalize or fine you if you fail to provide the required documentation when submitting this form. When you file this form, you are expected to have your payroll records and records of the taxable tips that your employees reported to you.

Finally, you risk fines and penalties if you fail to file this form on the required date each quarter. The IRS expects your 941 form to be filed and submitted to the government by the end of quarter dates of:

  • January 31
  • April 30
  • July 31
  • October 31

If you make a mistake on your form or if you submit it late, you may incur a penalty of five percent of the tax due for that month or the part of the month that the return is late. The penalty is capped at 25 percent, however. You also may be fined for making late payment or for paying less than what you owe.


Dealing with 941 Employment Tax Form Errors

Fixing 941 employment tax form mistakes proves to be relatively simple as long as you act quickly and decisively. You can resolve it yourself by filing the corrected form and paying what you owe.

However, when you owe expensive fines and penalties, you may find it best to allow a tax professional help you resolve the matter. Tax professionals have the knowledge, training, and experience needed to represent you before the IRS.

A tax pro can also negotiate a settlement that may lower the amount that you owe or have it forgiven altogether. The settlement can involve having the fines and penalties levied against you lowered or dismissed.

The government requires small business owners to pay taxes quarterly. You can avoid fines and penalties and fulfill this quarterly tax obligation by knowing how to file the 941 employment tax form correctly.

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