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Denver Business Tax Preparation for Form 940 and 941

November 21, 2018

One of the most difficult parts of running a business is keeping up with the finances and payroll aspects. Often, individuals who start a company or especially a small business have expertise in the area in which they are offering goods or services but many need assistance navigating the accounting, payroll, and especially tax implications on their new found venture. Everyone knows that taxes will be paid and due at certain times but there are also other areas which need to be addressed, especially if you have employees, which include a variety of other factors. Not only are payroll taxes separated from an individual employees check but the company must also make arrangements for paying social security and medicare taxes.

The Internal Revenue Service (IRS) uses two different filing forms associated with these different withholdings. Form 940 and 941 are separate and each has its own purpose but the two are commonly associated with one another. Understanding the differences and similarities between these two required filing methods can help any business owner get a better grasp of their organizations financial responsibilities. Following is a brief overview of each, how it is applied, and when the filing needs to occur.

Federal Form 940

Federal Form 940 is required to be submitted annually by January 31 for the preceding year. This form reports all Federal Unemployment Tax Act (FUTA) responsibilities for paying persons unemployment who have lost their positions. Typically, this is paid in association with a state regulated tax of a similar nature and is only paid by the employer - not deducted from any personal checks similar to federal income taxes.

Federal Form 941

For most businesses, Federal Form 941 needs to be submitted quarterly throughout the year. This form is used to report all income, social security, and Medicare taxes which are being withheld from employees’ paychecks and submit a payment for the employer’s portion of both social security and Medicare, if applicable.

The reporting periods including January, February, and March (first quarter) are due by the final day of the following month - April 30. April, May, and June (second quarter) would then be due July 31 - July, August, September (third quarter) by October 31 and finally, October, November, and December (fourth quarter) must be in by January 31.

Some small businesses can file only once per year if their tax liability is under $1,000 total, annually. These select few businesses would file Federal Form 944 instead of the 941 quarterly tax submissions.

If you need assistance navigating the tax waters associated with your business or help determining which, if any, of these federal forms you are required to file then contact the experts at Bloch, Rothman, and Associates. Their highly trained and knowledgeable associates can provide an overview of your business or personal tax situation, in addition to answering any questions regarding individual and business income taxes. Our associates also can assist with a variety of potentially different bookkeeping options which may be suitable for your needs and eliminate the stress associated with payroll completely. A full detailed review of your financial or tax situation can be completed in addition to resolution issues. All services, including free of charge E-filing options will be completed in a timely manner, depending on your restrictions and potential tax deadlines. Whether you need a simple explanation on a random tax form or are in need of a variety of other services our tax experts are ready and willing to assist. Call 303-321-7160 or contact us for a free, no obligation consultation.