Tips for Small Businesses When Filing Employment Tax Returns
There are two forms commonly used by small businesses when filing employment tax returns, one of which requires the payment of employment taxes on a quarterly basis, while the other involves payment once a year. The two forms aren’t interchangeable and taxpayers should be sure to always file according to their designated requirement, or risk delays and other complications down the line. For help deciding which type of tax return to file for your own small business, please call an experienced Florida tax return preparation lawyer who can advise you.
Employment Taxes
Business owners who have employees must fulfill certain employment tax-related responsibilities towards those individuals. This includes paying employment taxes, such as:
- Social Security and Medicare taxes;
- Federal income tax withholding; and
- Federal unemployment taxes.
Besides being required to deposit any federal income taxes withheld from employees, as well as Social Security and Medicare taxes, employers must also report these deposits, as well as any wages paid to employees. It’s important to note that there are two different deposit schedules: monthly and semi-weekly, that employers can use. Prior to the beginning of each year, employers must decide which of these schedules they will use, which is also partly based on the total tax liability they reported on Form 941. Furthermore, the schedules for depositing and reporting taxes are different, making it especially important for business owners to speak with a tax attorney if they are unsure of their filing deadlines.
Employer’s Quarterly Federal Tax Return
Small businesses that pay their employment taxes on a quarterly basis should file Form 941. These forms are used to:
- Report income taxes, as well as any Social Security taxes and Medicare taxes withheld from employees’ wages, tips, and other compensation;
- Claim specific employment tax credits and adjustments;
- Report the amount of employment taxes owed by the taxpayer; and
- Claim any overpayment of employment taxes.
Many small business owners can choose whether to file their taxes on a quarterly or annual basis. If, however, the IRS advises a company to file quarterly taxes, it must do so.
Employer’s Annual Federal Tax Return
Employers who owe $1,000 or less in taxes have the option of filing Form 944, which allows companies to avoid filing taxes quarterly and instead report any tax liabilities only once a year. This form cannot typically be used unless an employer receives an official notice from the IRS stating that the company is eligible to file an annual tax return. Once an employer is notified by the IRS that it can file Form 944, however, it must do so every year regardless of the taxes they owe, unless the agency tells them otherwise.
Speak with an Experienced Florida Tax Return Preparation Lawyer
If you own a small business and have questions about filing or paying your employment taxes, please don’t hesitate to call dedicated tax return preparation lawyer Ronald Cutler, P.A. at 386-490-9949 to learn more about your filing responsibilities. You can also schedule a free consultation with a member of our legal team by completing one of our brief online contact forms.
Resource:
irs.gov/forms-pubs/about-form-941
