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

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month and subtract that negative amount from your tax
Fill out both pages.
liability for the next month.
You must fill out both pages of Form 941 and sign it on the
second page. Failure to do so may delay processing of your
Here’s an example:
return.
Pine Co. discovered on February 6, 2006, that it
overreported social security tax on a prior quarter return by
$2,500. Its Form 941 taxes for the first quarter of 2006 were:
Part 2: Tell us about your deposit
January =
$2,000
schedule and tax liability for this
February =
$2,000
March =
$2,000
quarter.
Pine Co. reports liabilities on line 15 as follows:
14. State abbreviation
Month 1 =
$2,000
Month 2 =
0
In the spaces provided, write the two-letter U.S. Postal
Month 3 =
+$1,500
Service abbreviation for the state where you deposit your
Total
$3,500
taxes using Form 8109 or initiate EFTPS transfers. IRS uses
the state shown to determine banking days for purposes of
deposit due dates. Official state holidays for the state shown
The prior period adjustment ($2,500) offsets the $2,000
are not counted as banking days. If you deposit in multiple
liability for February and the excess $500 must be used to
states, enter “MU” in the spaces provided.
offset March liabilities. Since the error was not discovered
until February, it does not affect January liabilities reported
When you deposit in multiple states, IRS cannot
in Month 1 of line 15.
determine what portion of your liability was affected by a
state holiday and may propose a deposit penalty for one or
Using the above example, if the overreported social
more of the states where you made deposits. If you receive
security tax on a prior quarter return had been $10,000, Pine
a notice and your deposit due date was extended because
Co. could carry the excess negative adjustment of $6,000
($10,000 − $2,000 − $2,000) to the next quarter. Pine Co.
of a state bank holiday, respond to the notice citing the state
holiday and applicable deposit amount.
would only report $4,000 of the adjustment on line 7e
because line 10 must equal the total shown in line 15. See
15. Check one:
Form 941c for reporting requirements and information on the
option of filing a claim for refund of overpaid employment
If line 10 is less than $2,500, check the appropriate box in
taxes.
line 15 and go to Part 3.
If you reported $50,000 or less in taxes during the
lookback period (see below), you are a monthly schedule
Part 3: Tell us about your business.
depositor unless the $100,000 Next-Day Deposit Rule
discussed in section 11 of Pub. 15 (Circular E) applies.
Check the appropriate box on line 15 and fill out your tax
In Part 3, answer only those questions that apply to your
liability for each month in the quarter.
business. If the questions do not apply, leave them blank
and go to Part 4.
+
Month 1
+
Month 2
16. If Your Business Has Closed . . .
+
Month 3
If you go out of business or stop paying wages, you must file
Total tax liability for quarter
a final return. To tell IRS that a particular Form 941 is your
Note that your total tax liability for the quarter must equal
final return, check the box on line 16 and enter the date you
your total taxes shown on line 10. If it does not, your tax
last paid wages in the space provided. For additional filing
deposits and payments may not be counted as timely.
requirements, see If your business has closed... on page 2.
You are a monthly schedule depositor for the calendar
17. If You Are a Seasonal Employer . . .
year if the amount of your Form 941 taxes reported for the
If you hire employees seasonally — such as for summer or
lookback period is $50,000 or less. The lookback period is
winter only — check the box on line 17. Checking the box
the four consecutive quarters ending on June 30 of the prior
tells IRS not to expect four Forms 941 from you throughout
year. For 2006, the lookback period begins July 1, 2004,
the year because you have not paid wages regularly.
and ends June 30, 2005. For details on the deposit rules,
see section 11 of Pub. 15 (Circular E).
IRS will mail you two forms once a year after March 1.
Generally, we will not ask about unfiled returns if you file at
This is a summary of your monthly tax liability, not a
least one return showing tax due each year. However, you
!
summary of deposits you made. If you do not
must check the box every time you file a Form 941.
properly report your liabilities when required or if you
CAUTION
Also, when you fill out Form 941, be sure to check the
are a semiweekly schedule depositor and report your
box on the top of the form that corresponds to the quarter
liabilities on line 15 instead of on Schedule B (Form 941),
reported.
you may be assessed an “averaged” failure-to-deposit (FTD)
penalty. See Deposit Penalties in section 11 of Pub. 15
(Circular E) for more information.
Part 4: May we speak with your
If you reported more than $50,000 of taxes for the
lookback period (see above), you are a semiweekly
third-party designee?
schedule depositor. Check the appropriate box on line 15.
You must complete Schedule B (Form 941) and submit it
If you want to allow an employee, a paid tax preparer, or
with your Form 941. Do not use Schedule B
another person to discuss your Form 941 with the IRS,
(Form 941) if you are a monthly schedule depositor.
check the “Yes” box in Part 4. Then tell us the name, phone
Reporting adjustments on line 15. If your tax liability for
number, and the five-digit personal identification number
any month is negative (for example, if you are adjusting an
(PIN) of the specific person to speak with — not the name of
overreported liability in a prior period), do not enter a
the firm who prepared your tax return. The designee may
negative amount for the month. Instead, enter zero for the
choose any five numbers as his or her PIN.
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