Depositing Employment Taxes
The following employment taxes must be deposited:
- Federal income taxes withheld from each employee's pay.
- Each employee's share of social security and Medicare taxes withheld.
- The employer's share of social security and Medicare taxes.
- Plus or minus any prior period adjustments to the employer's tax liability,
- Minus any advance EIC payments.
The following is list of employment tax forms typically used by employers:
- Form 941, Employer's Quarterly Federal Tax Return
- Form 940, Employer's Annual Federal Unemployment (FUTA) Tax
- Form 944, Employer's Annual Federal Tax Return
- Form W-2, Wage and Tax Statement
- Form W-3, Transmittal of Income and Tax Statement
- Form W-4, Employee's Withholding Allowance Certificate
- Form I-9, Employment Eligibility Verification
Employment Tax Returns Explained (Forms 941 and 940)
Form 941, Employer's Quarterly Federal Tax Return:
Form 941 is used to report:
- Federal income taxes, social security and Medicare taxes withheld plus
- The employer's share of social security and Medicare taxes, plus
- Employment tax deposits made for the quarter.
Form 941 is due by the end of the month following the last month of each quarter.
You can mail Form 941 or file Form 941 electronically through an authorized third party transmitter using the IRS 941 online filing program.
Form 941 Due Dates:
- April 30
- July 31
- October 31
- January 31
- Form 940, Employer's Annual Federal Unemployment (FUTA) Tax:
- FUTA is strictly an employer paid tax; employees do not pay it.
- Form 940 is filed annually. It may be file electronically.
- Form 944, Employer's Annual Federal Tax Return:
- Do not file Form 944 unless you were notified by the IRS in writing to do so.
- If you file Form 941 (most employers do) you do not file Form 944.
Zero Wage Return
If you have not filed a final Form 941 or Form 944, or are not a seasonal employer, you must continue to file a Form 941 or Form 944 even for periods during which you paid no wages.
The IRS encourages you to file your Zero Wage Forms 941 or 944 electronically using IRS e-file at www.irs.gov.
Avoid Combining Employment Tax Deposits With Non-employment Tax Deposits
Do not combine deposits for employment taxes with deposits for non-employment taxes. For example, non-employment taxes such as, federal income taxes withheld from pensions, annuities, IRA distributions, and gambling winnings should not be combined with taxes withheld from employees' pay.
Using a payroll service is a smart idea if you have employees. You'll avoid the time-consuming and tedious process of preparing a payroll, as well as potential compliance penalties associated with payroll reporting and deposits.
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Have an accounting or bookkeeping question? Email it to me.
- Return to the Payroll Taxes Table of Contents to find related links.