Understanding IRS Payroll Forms


Emptech's founder, Jeff Aleixo


Jeffrey Aleixo

Stressed Payroll Forms IRS Forms

While owning a business can be rewarding on many levels, employers have to meet different types of requirements in order to run it successfully. One of the biggest responsibilities employers have is knowing which Internal Revenue Service (IRS) payroll forms to fill out based on their employees and business type.

Missing a payroll tax deadline or filing the wrong form can have expensive consequences given that the IRS penalizes businesses with fines that vary by the level of the charge. Therefore, it is necessary for employers to know which IRS payroll forms they need to file, their due dates, and where to send each form.

Payroll Report Forms

IRS payroll forms are used to inform the government of payroll tax liabilities. Employers use them to document the taxes withheld from employee wages and the taxes paid. Payroll report forms have to be submitted for both federal and state taxes. 

Form 940

Form 940 is the Employer’s Annual Federal Unemployment Tax Return. This payroll tax form is used to report the federal unemployment (FUTA) tax. This tax funds unemployment compensation to employees who have recently lost their jobs. Businesses are obliged to pay FUTA taxes if they paid at least $1,500 in wages in a quarter within the past two years. These taxes are paid quarterly but reported once a year. The due date for Form 940 is January 31.

Form 941

Form 941, the Employer’s Quarterly Federal Tax Return, reports the number of employees, their wages and taxable tips, and the federal income taxes withheld. Among IRS payroll forms, this one reports federal income and FICA taxes along with any adjustments made to them to the IRS each quarter.

Employers need to file this Form 941 unless they have already submitted a final return, are seasonal employers, or employ farm or household workers. Form 941 is a quarterly form, and due dates for each quarter include April 30, July 31, October 31, and January 31.

Form 944

Form 944 is also known as the Employer Annual Tax Return, and the only businesses that qualify to use it are those that have $1,000 or less in annual liabilities for Social Security, Medicare, and federal income taxes. In addition to this, employers need to have a written notification from the IRS to use this form instead of Form 941. This is one of the IRS payroll forms submitted once annually instead of quarterly, and the due date is January 31.

Form W-2

This form is used to report each employee’s annual compensation and all federal, state, and other payroll tax withholdings. Form W-2 is one of the better-known IRS payroll forms and should be given to each employee at the end of each year.

Form W-2 can be sent in either paper or digital form and should be received by employees no later than January 31 of the following year. Employers should be careful not to fill out this form for independent contractors and use Form 1099 instead.

Form W-3

Form W-3, Transmittal of Wage and Tax Statements, summarizes information from Form W-2. It includes total earnings, FICA wages, federal income wages, and tax amount withheld. This form is not given to employees and should be sent to federal and state governments along with Form W-2.

Use this detailed guide to ease the process of calculating and depositing your payroll taxes, filing the appropriate tax filings to the federal and state agencies, and staying compliant with tax regulations.

Form 1095-B

Form 1095-B is used to report employee health coverage in cases when employers provide a health insurance plan for employees that meets or exceeds minimum essential coverage. This is one of the IRS payroll forms that includes information such as the type of health insurance, whether dependents are covered, and the coverage period for the prior year. Form 1095-B is filed for each full-time, covered employee by January 31.

Form 1094-B

Form 1094-B, Transmittal of Health Coverage Information Returns, is a form that summarizes Form 1095-B. Similar to Form W-3, Form 1094-B outlines the information from Forms 1095-B, and is not given to employees but sent along with Form 1095-B. The deadline for Form 1094-B is the same as Form 1095-B.

Form 1099

Businesses file Form 1099 as an information return when they pay independent contractors and any income made through contractual work is reported through this form. Since no taxes are withheld, independent contractors are responsible to report and pay income tax based on the information listed on Form 1099. On the other side, businesses are responsible for sending Form 1099 to independent contractors before January 31.

Other IRS Payroll Forms

In addition to these forms, there are other IRS payroll forms that businesses may need to use, too. The IRS provides an extended list of business tax forms along with instructions, so employers can make sure to file them by their due dates to avoid penalties.

Also, employers do not need to send all payroll forms to the IRS but need to keep them in their records. For example, Form W-4, Employee’s Withholding Certificate, determines the amount of federal income tax to withhold from an employee’s wages. This form includes information such as the employee’s filing status, multiple jobs adjustments, amount of credits, amount of other income, amount of deductions, and any additional information needed to compute the right amount of income tax to withhold from employee paychecks.

While employers are not required to report any information that employees claim on their Form W-4, they are still subject to review and employers may be directed to send certain Forms W-4 to the IRS.

Meeting Requirements Regarding the IRS Payroll Forms

Having employees means that employers have to accept the responsibility of payroll taxes. Not paying them to tax authorities is against the law, and if the sums are large and the pattern repeats, the IRS can impose criminal sentences and even close businesses.

While mistakes can happen, if there are signs of negligence or intent, employers can face some serious fines and potential legal troubles. Missing payments and reporting deadlines or using the wrong IRS payroll forms can result in the tax authorities getting more aggressive each time an error is left uncorrected.

Ensuring that employers use up-to-date IRS payroll forms can be a challenge, often requiring a significant investment of time and effort. However, by outsourcing payroll management, businesses can ensure constant compliance with the IRS. As a result, employers do not need to worry about submission guidelines, the accuracy of payment, or getting payroll taxes paid on time.

Use unique software based on electronic administration, timely procedures, and guaranteed compliance to handle changing regulations and payroll tax compliance pressure.

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