Q:

What is the purpose of IRS Form 941?

A:

Quick Answer

The purpose of IRS Form 941 is for employers to report withholding taxes paid on behalf of the employees, Turbo Tax reports. An employer must file this form four times per year.

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Full Answer

Any employer or business who pays wages to employees must file Form 941 each quarter and must do so even when there are no employees during some of the quarters, Turbo Tax advises. The exception is for seasonal employers who don't pay employees during one more quarters and those who pay farm or household employees.

When completing Form 941, employers must report the number of employees it has, the total wages paid and the amount of taxes withheld. The employer pays the taxes to the IRS. The IRS imposes four filing deadlines for each year: April 30, July 31, Oct. 31 and January 31, Turbo Tax says. The deadlines are the last day of each month that follows the close of the quarter.

The IRS may impose failure to file penalties at 5 percent of the tax due for each month the return is filed late, notes Turbo Tax. The maximum penalty is 25 percent. There are separate penalties for underpaying the tax due, and that amount is between 2 and 15 percent of the underpayment, depending on how many days the employer is late paying the correct amount due.

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