How to Do Form 941

By Cellina LaForey
Employers must file tax form 941.
Jupiterimages/Polka Dot/Getty Images

If you are an employer, you are required to file quarterly federal tax returns. The form used for reporting employee wages is Form 941. It must be updated quarterly and filed 30 days after the close of the quarter. Therefore, if you are filing Form 941 for the first quarter of the year, the form is due 30 days after March 31st, which is April 30th. To avoid tax fees and penalties, make sure to file the form on time.

Download form 941 and the instructions from the website. The instructions are not included on the four-page form itself.

Assemble the necessary tax documents for completing the form. The tax documents include payroll figures, group insurance premium information, human resource information (such as the number of employees), and any other employee/tax-related documentation.

Complete the demographic information at the top of form 941. The demographic information includes the employer ID number (Tax ID), name, trade name, and address. In addition to the demographic information you must select the quarter for which you're filing form 941.

Insert the employee and wage information in Part I of form 941. On Part I you must include the number of employers you paid in the quarter, the collective amount in tips, and wages paid in compensation. In other words, list the total amount you paid for all of your employees; do not list the amounts on a per-employee basis. In this section you also can list detailed information such as sick-pay adjustment, payment for group term insurance, and COBRA premium assistance.

Fill in the tax deposit schedule under Part 2 of form 941. Here is where you include the state where you made your tax liability deposits. (Use "MU" if you made deposits in more than one state.) After indicating the state for the deposits, list each month's tax liability in the appropriate box. If your total taxes after the EIC (earned income credit) adjustment is less than $10,000 (as indicated on line 10 of form 941), skip this section and go to Part 3.

Notify the government if your business has closed or if your employers were seasonal and you no longer have to file form 941. If this step does not apply to your business, skip Part 3 and continue to Part 4.

Give or deny permission for the government to speak to a third-party designee. Part 4 of form 941 is where you can give the IRS permission to speak to your tax preparer, an employee, or any authorized third person to discuss your taxes. If you do not want to give permission, select "No" and continue to Part 5.

Sign your tax form. Part 5 is where you and your tax preparer must sign the form. Make sure to include the Tax ID number for the tax preparer if it is someone other than you.