Mailing Address Form Form 941 Without Payment
If you are an employer with employees, you will need to file a Form 941. This quarterly tax return is the IRS’s way of keeping track of employees and their wages as the taxes withheld from employees are credited to them in payment of their tax liabilities.
As an employer, you are responsible for your share of social security and Medicare taxes, which is not withheld from an employee. Failure to do so has severe consequences, such as penalties, amounts assessed to you personally as a penalty, and depending on the amount it could lead to jail time.
In this article we’ll go through the Form 941. As always, if there is ever any doubt, it’s best to contact a tax or payroll professional to ensure your forms are correct and that your Federal Tax Deposits are correct and made timely. There are many companies out there who specialize in payroll and it’s always a good idea to ask questions versus attempting to handle this on your own.
About Form 941?
There are a few different wage-related taxes you need to report on Form 941:
Withholding taxes: A business with employees is required to withhold certain taxes from their employee’s paycheck. These taxes are Federal Income, Medicare and Social Security, also known as FICA. The FICA taxes, Medicare and Social Security, are paid a total percentage of 7.65%, which is divided into 6.2% for Social Security and 1.45% for Medicare.
As an employer, you are required to file this form if any of the following apply:
- You pay wages
- Employees report tips
- Withheld Federal Income Tax
- Both the employer and employee share of the social security and Medicare taxes.
- If you have any employees who earn more than $200,000 per year, additional Medicare taxes need to be withheld from employees.
Note: If your payroll tax liability is less than $1,000 annually, you will file Form 944 as you will only pay these taxes once per year versus every quarter.
Form 941 Filing Deadlines
As this return is due quarterly, the Form 941 is due the month after the quarter ends on the last day of that month, such as:
- April 30 (1st Quarter months of January, February and March)
- July 31 (2nd Quarter months of April, May and June)
- October 31 (3rd Quarter months of July, August and September)
- January 31 (4th Quarter months of October, November, December)
Like any return, if the due date falls on a weekend or Federal holiday, the return is due the next business day. For example, in year 2020, October 31 is a Saturday. Therefore, the 3rd Quarter Form 941 will be due on Monday, November 2.
Form 941 Instructions
Taking the time to complete the Form 941 correctly is straight forward if you have the information available to complete in its entirety. You will need to know the following:
- The number of people you employ
- Employee ID numbers
- Payroll records
- Forms W-2 and W-3
- The total amount you owe the IRS, if Federal Tax Deposits were not previously made.
Form 941 Calculations
Income Tax Withholding
[Employee’s Tax Rate] x [total wages paid for the quarter]
How to determine your employee’s:
- Tax rate: Determined by their filing status and annual earnings. Review Form W-4 submitted by employee.
- Total wages paid for the quarter: Divide your employee’s annual wages by 4. We are filing the quarterly return, so using the quarterly method versus how an employee is paid, such as monthly, semimonthly, biweekly, weekly or daily.
The best system to use for this calculation is the IRS Wage Bracket Method Table, which can be found here.
Social Security Tax
[12.4% Social Security Tax Rate] x [number of employees] x [wages up to $132,900 per employee]
Remember, both employees and employers contribute 6.2% toward Social Security tax; therefore 12.4%.
Social Security tax has a cap and therefore only applies to the first $132,900 of an employee’s wages.
Medicare Tax
[2.9% Medicare Tax Rate] x [total taxable wages]
Note: If you have any employees who earn more than $200,000 per year, additional Medicare taxes need to be withheld from the employee, but not from the employer. This additional amount is 0.9%.
Remember, both employees and employers contribute 1.45% toward Medicare tax; therefore, 2.9%.
Employer Responsibilities
As an employer, you are responsible for all things payroll, even after the employees receive their checks. It also includes paying the employer’s share of payroll taxes, as discussed above, making timely Federal Tax Deposits, filing quarterly Form 941 and filing W-3’s and W-2’s and Form 940 yearly.
All of this on top of running a business can be horribly overwhelming. Many companies, big and small, have contracted with payroll companies for assistance in filing these forms and ensuring the taxes are paid, not only in the correct amount, but timely too.
As it’s the employer’s responsibility to ensure payroll is correct and filed on time, any errors can cause a disruption in the system and bring an audit or a 4180 Interview. If there is a Revenue Officer assigned as an employer failed to make payments, there is big trouble ahead and you seriously need to consider speaking with a tax professional or tax resolution specialist!
Penalties & Deadlines
The only sure way to avoid penalties and fines set by the IRS is to ensure you are filing your Form 941 timely, meaning following the schedule noted above. In addition, you must ensure you are making Federal Tax Deposits with every payroll.
If you file the Form 941 late, each month, or part of the month, the return remains unfiled the business will be assessed a Failure to File penalty, which is 5% of the unpaid tax due on the return. This penalty maxes out at 25% of the tax due. In addition, for each month, or part of the month, the tax due remains unpaid, the business will be assessed a Failure to Pay penalty of 0.5%.
The reason many business fail is because of payroll issues. Businesses are short of funds in one department and to keep the company going, they “borrow” from the payroll fund. Unfortunately, when that begins to happen, the downhill slide isn’t very far from hitting rock bottom. Not only are you stealing from your employees by not submitting the taxes you withheld from their paychecks, but you are also shorting them the funds you owe for Social Security and Medicare. If the business continues this path, the IRS sees this as pyramiding as the debt continues to mount without any resolution. In the end, the business case will be assigned to an IRS Agent, Revenue Officer, who will begin a 4180 Interview holding certain parties accountable for failure to submit payroll and will assess those individuals personally.
If payroll overwhelms you or worries you, it should! The IRS takes payroll very seriously and it should not be the last thing a business thinks about but should be the first thing a business is sure to handle. As suggested many times throughout this article, it’s best to contact a payroll professional to handle this portion of your business. The cost is absolutely worth it as the penalties alone could wreak havoc on a budget!
Can Form 941 Be Filed Electronically?
Yes, Form 941 can and should be filed electronically. You should file online via the IRS website, and you must use the EFTPS.gov service to transfer funds electronically.
Where to Mail Form 941
Upon completion of the Form 941, signed, dated and Title including a check written out to the “United States Treasury,” be sure to include your EIN on the payment. There are different address for which to mail the Form 941 depending on which state the business is located:
- If you are not submitting a payment:
Department of the Treasury
Internal Revenue Service, Kansas City, MO 64999-005, or
Department of the Treasury
Internal Revenue Service, Ogden, UT 84201-0005
If you are submitting a payment:
Internal Revenue Service
PO Box 806532
Cincinnati, OH 45280-6532, or
Internal Revenue Service
PO Box 932100
Louisville, KY 40293-2100
If you mail the return to the incorrect address, the IRS will transfer that return to the correct processing office, which could cause a delay in processing due to the transfer. So, be sure to check the instructions for Form 941 to ensure you are mailing to the correct address to avoid any delays.
New York State Tax Rate | NY State Tax Rates
Tax Relief Solutions for New York State
The State of New York is among one of the highest tax rates in the Nation. The only states currently higher are California, Oregon, Hawaii and Minnesota.
As with many Americans, attempting to figure out your taxes is tiresome with all the brackets and cumbersome if you’re not sure what to look for. So, if you are moving or thinking of relocating to the State of New York, hopefully this will help shed a little light on taxes. As with any tax, it’s always a smart choice to reach out to a professional tax preparer as they are familiar with rates, what to expect, etc.
Finally, New York imposes all three major state taxes: income tax, sales tax, and property taxes.
New York State Income Tax
New York State income tax rates in 2020 range from 4% to 8.82% depending on your income and filing status. Now, if you choose to reside in New York City, you will also need to pay a local tax as the City imposes its own tax on top of the State tax.
Those rates range from 3.078% to 3.876%. NY State Tax Tables is a good place to start. These tables provide a tax calculator and other questions you should answer to assist in finding out which bracket you fall under. Using this resource will assist you in knowing if you will receive a refund or expect to pay some tax. If you do expect to owe, this site will also update you on what penalties you could expect for late payments.
The State of New York shows tax table according to your filing status and income level. So, if you are Single and earn $8,500 or less, you can expect to pay 4%. If you are Married Filing Joint and earn $17,150 or less, you can also expect to pay 4%. On the other side of this table, if you are Single and earn over $1,077,550 you can expect the top tax bracket of 8.82%. If you are Married Filing Joint and earn $2,155,350 you can also expect to pay 8.82%. The State does provide a quick calculator where you enter in your income, filing status and dependents and it will provide a general amount you could expect to owe in tax. It’s not perfect, but a lot better than not knowing and then paying penalties and interest on top of what you owe.
New York State Sales Tax
The State of New York has a Sales and Use Tax Rate. Sales Tax applies to retail sales of tangible (real) personal property and services. Use Tax applies if you buy these tangible items and services outside the State but use it within the State of New York.
There are two sales tax rates to be aware of; one for New York City and one for New York State. If you are shopping and purchase clothing items or shoes and spend under $110, there is no sales tax. However, if you spend more than $110, New York City is 4.5% Sales Tax and 4% in New York State Sales Tax.
If you are purchasing personal property like furniture or electronics, utility services like gas, electricity, telephone, using a cleaning service or buying an admission to a place of amusement like a park or theater, the City Sales Tax rate is 4.5%, the State Sales and Use tax is 4%, the Metropolitan Commuter Transportation District surcharge of 0.375% = a Sales and Use Tax of 8.875%.
Next are services, such as barbers, nail salons, tanning parlors and fitness clubs, there is a City Sales Tax rate of 4.5% on the service, but there is no State Sales Tax. However, if your purchase any products at these establishments, an $8.875% combined City and State tax will be charged.
If you choose to reside in Manhattan, the Sales and Use taxes are extensive. For example, if you own a vehicle registered in Manhattan, you could pay a tax rate of 18.375% for parking, garaging, or storing your vehicle. Some may qualify for a Manhattan Resident Parking Tax exemption which would reduce this rate by 8%, therefore you are only paying $10.375%. Before moving into Manhattan, you may want to check to be sure you are eligible for this reduced rate.
New York State property tax
Property taxes are confusing no matter which state you reside. Oddly enough, the property tax in New York City is lower than the State at just .090%, while the State average is 1.68%. The best place to start is here at the State of NY Online Resource. This guide will help you navigate the rates, assessed values by county and exemptions.
The tax rates, as with most states, are applied to the assessed value of your home. The rates you will find on your real estate tax bill, include county, city, school district and possibly special rates to fund projects like parks. The rates are recalculated each year, and my increase or decrease depending on the rate of inflation, but it won’t necessarily change the amount that much. For example, if you reside in New York County, the average home value is $915,300 with a tax rate of 0.90%, so you could expect to pay $8,237 in taxes. Even though this County has the lower rate, the homes are more expensive per square foot thereby you end up paying more. Another example is if you live in Westchester County, the average home value is $513,300, with a rate of 1.95%, so you could expect to pay $10,000 in taxes.