Instructions For Form 941 - Employer'S Quarterly Federal Tax Return

are not counted as banking days. If you deposit in multiple

Using the above example, if the overreported social

states, enter “MU” in the spaces provided.

security tax on a prior quarter return had been $10,000, Pine

Co. could carry the excess negative adjustment of $6,000

When you deposit in multiple states, IRS cannot

($10,000 − $2,000 − $2,000) to the next quarter. Pine Co.

determine what portion of your liability was affected by a

would only report $4,000 of the adjustment on line 7e

state holiday and may propose a deposit penalty for one or

because line 10 must equal the total shown in line 15. See

more of the states where you made deposits. If you receive

Form 941c for reporting requirements and information on the

a notice and your deposit due date was extended because

option of filing a claim for refund of overpaid employment

of a state bank holiday, respond to the notice citing the state

taxes.

holiday and applicable deposit amount.

15. Check one:

Part 3: Tell us about your business.

•

If line 10 is less than $2,500, check the appropriate box in

line 15 and go to Part 3.

•

In Part 3, answer only those questions that apply to your

If you reported $50,000 or less in taxes during the

business. If the questions do not apply, leave them blank

lookback period (see below), you are a monthly schedule

and go to Part 4.

depositor unless the $100,000 Next-Day Deposit Rule

discussed in section 11 of Pub. 15 (Circular E) applies.

16. If Your Business Has Closed . . .

Check the appropriate box on line 15 and fill out your tax

If you go out of business or stop paying wages, you must file

liability for each month in the quarter.

a final return. To tell IRS that a particular Form 941 is your

final return, check the box on line 16 and enter the date you

Month 1

last paid wages in the space provided. For additional filing

Month 2

requirements, see If your business has closed... on page 2.

Month 3

Total tax liability for quarter

17. If You Are a Seasonal Employer . . .

Note that your total tax liability for the quarter must equal

If you hire employees seasonally — such as for summer or

your total taxes shown on line 10. If it does not, your tax

winter only — check the box on line 17. Checking the box

deposits and payments may not be counted as timely.

tells IRS not to expect four Forms 941 from you throughout

You are a monthly schedule depositor for the calendar

the year because you have not paid wages regularly.

year if the amount of your Form 941 taxes reported for the

IRS will mail you two forms once a year after March 1.

lookback period is $50,000 or less. The lookback period is

Generally, we will not ask about unfiled returns if you file at

the four consecutive quarters ending on June 30 of the prior

least one return showing tax due each year. However, you

year. For 2006, the lookback period begins July 1, 2004,

must check the box every time you file a Form 941.

and ends June 30, 2005. For details on the deposit rules,

Also, when you fill out Form 941, be sure to check the

see section 11 of Pub. 15 (Circular E).

box on the top of the form that corresponds to the quarter

This is a summary of your monthly tax liability, not a

reported.

summary of deposits you made. If you do not

properly report your liabilities when required or if you

CAUTION

Part 4: May we speak with your

are a semiweekly schedule depositor and report your

liabilities on line 15 instead of on Schedule B (Form 941),

third-party designee?

you may be assessed an “averaged” failure-to-deposit (FTD)

penalty. See Deposit Penalties in section 11 of Pub. 15

If you want to allow an employee, a paid tax preparer, or

(Circular E) for more information.

another person to discuss your Form 941 with the IRS,

•

check the “Yes” box in Part 4. Then tell us the name, phone

If you reported more than $50,000 of taxes for the

number, and the five-digit personal identification number

lookback period (see above), you are a semiweekly

(PIN) of the specific person to speak with — not the name of

schedule depositor. Check the appropriate box on line 15.

the firm who prepared your tax return. The designee may

You must complete Schedule B (Form 941) and submit it

choose any five numbers as his or her PIN.

with your Form 941. Do not use Schedule B

By checking “Yes,” you authorize the IRS to talk to the

(Form 941) if you are a monthly schedule depositor.

person you named (your designee) about any questions we

Reporting adjustments on line 15. If your tax liability for

may have while we process your return. You also authorize

any month is negative (for example, if you are adjusting an

your designee to:

•

overreported liability in a prior period), do not enter a

give us any information that is missing from your return,

•

negative amount for the month. Instead, enter zero for the

call us for information about processing your return, and

•

month and subtract that negative amount from your tax

respond to certain IRS notices that you have shared with

liability for the next month.

your designee about math errors and return preparation.

IRS will not send notices to your designee.

Here’s an example:

You are not authorizing your designee to bind you to

anything (including additional tax liability) or to otherwise

Pine Co. discovered on February 6, 2006, that it

represent you before the IRS. If you want to expand your

overreported social security tax on a prior quarter return by

designee’s authorization, see Pub. 947, Practice Before the

$2,500. Its Form 941 taxes for the first quarter of 2006 were:

IRS and Power of Attorney.

January =

$2,000

The authorization will automatically expire 1 year from

February =

$2,000

the due date (without regard to extensions) for filing your

March =

$2,000

Form 941. If you or your designee want to terminate the

authorization, write to the IRS office for your locality using

Pine Co. reports liabilities on line 15 as follows:

the “Without a payment” address under Where Should You

Month 1 =

$2,000

File on page 4.

Month 2 =

Month 3 =

+$1,500

Total

$3,500

Part 5: Sign here—

Who Must Sign the Form 941?

The prior period adjustment ($2,500) offsets the $2,000

liability for February and the excess $500 must be used to

Form 941 must be signed as follows.

offset March liabilities. Since the error was not discovered

•

until February, it does not affect January liabilities reported

Sole proprietorship — The individual who owns the

in Month 1 of line 15.

business.

-7-

Instructions For Form 941 - Employer'S Quarterly Federal Tax Return - 2006 Page 7

Related Articles

Related forms

Related Categories