The following information explains a brief overview and how each box on the 941 corresponds with information entered into Sage Peachtree.

Transcription

1 941 Overview Last Updated: 5/10/11 Sub-Product: Summary: Version: 2009 & Later Sage Peachtree Pro Accounting, Sage Peachtree Complete Accounting, Sage Peachtree Premium Accounting, Sage Peachtree Premium Accounting Accountants' Edition, Sage Peachtree Premium Accounting for Manufacturing, Sage Peachtree Premium Accounting for Distribution, Sage Peachtree Premium Accounting for Construction, Sage Peachtree Premium Accounting for Non-Profit, Sage Peachtree Quantum, and Sage Peachtree Quantum Accountants Edition. 941 Overview and Explanation of Fields The following information explains a brief overview and how each box on the 941 corresponds with information entered into Sage Peachtree. 941 Overview A business employer files the quarterly Form 941 Employer's Quarterly Federal Tax Return to report: The wages paid (adjusted gross for FIT, adjusted taxable gross for Soc_Sec and Medicare) The tips employees have reported (added to FIT and Medicare adjusted gross, reported on a separate line for Soc_Sec) The Federal income tax amount withheld from employees The Social Security (4.2%) taxes withheld from employees (calculated on 941 based on adjusted, taxable gross) The Medicare (1.45%) taxes withheld from employees (calculated on 941 based on adjusted, taxable gross) The employer s share ( of Social Security (6.2%) and Medicare (1.45%)taxes Any Advance Earned Income credit (EIC) payments to the employee. When is the 941 filed? Form 941 is a quarterly report. It is due by the last day of the month that follows the end of the quarter. The Quarter Includes... Quarter Ends Form 941 Is Due 1. January, February, March March 31 April April, May, June June 30 July July, August, September September 30 October October, November, December December 31 January 31 For example, wages paid during the fourth quarter, October through December, must generally be reported and filed with the IRS using Form 941 by January 31st. If the due date for filing a return falls on a Saturday, Sunday or legal holiday, you may file the return on the next business day. The e-filing deadline is 3 business days before the form is due. For example, if customers choose to e-file, the fourth quarter 941 form must be submitted by Thursday January 26, When the quarterly 941 is sent to the IRS, is a payment for the employee deducted taxes and employer share of Soc_Sec and Medicare included? Generally, only taxpayers with a quarterly tax liability of less than $2,500 may pay with the 941 tax return. Employers with a quarterly tax liability of more than $2,500 are required to deposit their employment taxes before the Form 941 is filed. Page 1 of 9

2 What is the Form 8109, Federal Tax Deposit Coupon? Depending on the payment schedule mandated by the IRS, the employer will deposit taxes on a monthly or a semi-weekly basis (many accountants urge their clients to make the deposits at the same time they pay their employees). Deposits are made either by the Electronic Federal Tax Payment System (EFTPS), or by using Form 8109, Federal Tax Deposit Coupon, which must accompany the payment. When should an employer file the Schedule B portion of Form 941? The function of Part 2 of Form 941 or Schedule B is to prove to the IRS when the employer paid their employees. IRS will use this information to verify if the deposit for payroll taxes was made on time. If an employer s quarterly tax liability is $2,500 or more, and you are a monthly schedule depositor, you must complete the Tax liability for each month in Part 2 of Form 941. If an employer s quarterly tax liability is $2,500 or more, and you are a semi-weekly schedule depositor, you will need to complete the Schedule B for semi-weekly depositors. It is imperative that employers complete Part 2 of Form 941 or Schedule B correctly. Otherwise, it may appear to the IRS that you did not deposit taxes when due. The IRS can impose a range of late deposit penalties, depending on the length of time the deposit is late. Page 2 of 9

3 Explanation of Fields 941 The following pages contain information on how each box on the 941 corresponds with information entered into Sage Peachtree. The information about the boxes on the 941 is based on the 2011 form. The images are from Sage Peachtree Premium Accounting Release If you are using a different version of Sage Peachtree, your screen may vary slightly. Note: Always check the web site for the latest updates to the 941 Form. *From Instructions for Form 941 (Rev. January 2011) from the Department of the Treasury Internal Revenue Service. For addition information on the instructions go to the web site Page Box Explanation of Data Where the information comes from Address Box Report for this Quarter Company Name, Address, Federal Employer ID Defines the quarter being reported in Maintain, Company Information Will check the current quarter from the Payroll Tax Form Selector window automatically. Page 3 of 9

4 941 Box Explanation of Data Where the information comes from Box 1 Box 2 Box 3 Box 4 Number of employees who received wages, tips, or other compensation in this quarter Wages, tips, and other compensation Total income tax withheld from wages, tips and other compensation (Check box) No wages subject to social security or Medicare * If no wages, tips, and other compensation on line 2 are subject to social security or Medicare tax, check the box on line 4. Pulls the value based on the number of employees who received at least one paycheck during the quarter the form is being filed. Pulls values from the EmployEE Fields tab of the Maintain, Employees/Sales Reps window, Federal Income Adjusted Gross. The box's tax value is based on information that is set up by clicking the Federal Income Adjust button. Note: If the tax is selected to Use Defaults (or STD), then check the Maintain, Default Information, EmployEE Fields tab. Pulls the value based on the Quarterly total for the payroll fields. This amount represents the total amount of Federal withholding for the quarter. This should match the Federal withholding column of the Quarterly Earnings Report. This line is left blank. You would manually enter a checkmark if this applies. Box 5a, 5b, 5c--Column 1 Total social security wages, social security tips, and Medicare wages and tips * Total wages, sick pay, or fringe benefits subject to social security taxes you paid to your employees during the quarter. * All tips your employees reported to you during the quarter until the Pulls values from the EmployEE Fields tab of the Maintain, Employees/Sales Reps window. The box's tax value is based on information that is set up by clicking the Adjust button. The sequence of the payroll fields on these two tabs should never be changed. Note: If the tax is selected as the Use Defaults or STD, then check the Maintain, Default Information, EmployEE Fields tab. Page 4 of 9

5 Box 5a, 5b, 5c--Column 2 Box 5d total of the tips and wages for an employee reach $106,800 in * All wages, tips, sick pay, and taxable fringe benefits that are subject to Medicare tax. Tax Liability for boxes 5a, 5b, and 5c Total social security and Medicare taxes Automatically calculates based on the information printed from 5a, 5b, 5c Column 1. Automatically calculates based on the information printed from 5a, 5b, 5c Column 2. Box 5e Section 312(q) Notice and Demand- Tax due on Unreported Tips Enter the tax due from a Section 3121(q) Notice and Demand on line 5e. The IRS issues a Section 3121(q) Notice and Demand to advise an employer of the amount of tips received by employees who failed to report underreported tips to the employer. Box 6a Reserved for future use Do not complete Box 6b Reserved for future use Do not complete Box 6c Reserved for future use Do not complete Box 6d Reserved for future use Do not complete Box 6e Total Taxes before Adjustments Automatically calculated (lines 3+ 5d +5e = line 6e). 941 Box Explanation of Data Where the information comes from Box 7 Current quarter's fractions of cents * The employee share of amounts shown in column 2 of lines 5a 5c may differ slightly from amounts actually withheld from employees paychecks due to the rounding of social security and Medicare taxes based on statutory rates. Pulls the value based on the difference between tax calculated for each paycheck and tax calculated for the entire quarter after selecting a filing status on line 17 page 2. Box 8 Box 9 Current quarter s sick pay Use a minus sign (if possible) to show an adjustment that decreases the total taxes shown on line 6e. Current quarter s adjustments for tips and group-term life insurance Use a minus sign (if possible) to show an adjustment that decreases the total taxes shown on line 6e. Manually enter the adjustment for the employee share of social security and Medicare taxes that were withheld by the third-party sick pay payer. Manually enter the adjustments for any uncollected employee share of social security and Medicare taxes on tips and the uncollected employee share of social security and Medicare taxes on group-term life insurance premiums paid for former employees. Page 5 of 9

6 941 Box Explanation of Data Where the information comes from Box 10 Total taxes after adjustments Automatically calculated (lines 6e + 9 = line 10). Box 11 Box 12a Box 12b Total deposits made for the quarter, including overpayment applied from a prior quarter and overpayment applied from Form 941-X or Form 944-X. COBRA premium assistance payments Number of individuals provided COBRA premium assistance reported on line 12a. Releases 2009 and later do not automatically calculate total deposit. You must manually enter the total deposit for the quarter. Manually enter the information Manually enter the information Box 13 Add lines 11 and 12a Automatically adds lines 11 and 12a Box 14 Balance Due Automatically calculates if line 10 is more than line 13. Box 15 Overpayment Automatically calculates if line 13 is more than line 10. Page 6 of 9

7 941 Page Box Explanation of Data Where the information comes from Box 16 State abbreviation where you made your deposit. If you deposit in multiple states, enter MU. Manually enter the state abbreviation where you made the deposit. Note: This line is left blank by Sage Peachtree. You have to manually enter the state. Box 17 (Check box) Line 10 is less than $2,500 This line is left blank by Sage Peachtree. You would manually enter a checkmark if this applies. Box 17 Month 1, Month 2, Month 3, Total Box 17 (Check box) You were a monthly schedule depositor for the entire quarter Monthly totals for Federal Income Tax, Social Security Tax (EE and ER) liability, and Medicare (EE and ER) liability (Box 15 Month 1, Month 2, and Month 3). Quarterly total for Federal Income Tax, Social Security Tax (EE and ER) liability, and Medicare (EE and ER) liability (Box 15 Total). The total tax liability for the quarter must equal line 10. * If you reported $50,000 or less during the lookback period, you are a monthly schedule depositor.the lookback period is the four consecutive quarters ending on June 30 of the prior year. For 2011, the lookback period begins July 1, 2009, and ends June 30, (Check box) You were a semiweekly schedule depositor for any part of this quarter* If you reported more than $50,000 of taxes for the lookback period, you are a semiweekly schedule depositor. Pulls the monthly (Month 1, Month 2, Month 3) and quarterly (Total) total for Fed_Income, Soc_Sec, Medicare, Soc_Sec_ER, and Medicare_ER. This box is left blank by Sage Peachtree. You would manually enter a checkmark if this applies. This line is left blank by Sage Peachtree. You would manually enter a checkmark if this applies. Page 7 of 9

8 Parts 3, 4 and 5 of page 2 are manually entered by the employer. Page 8 of 9

9 941 Schedule B (Page THREE) NOTE: In versions 2009 and later, the SEMI-WEEKLY depositor filing status MUST be selected on line 17 in Part 2 of the 941 before you can access the Schedule B Form. Schedule B EIN Name Calendar Year Report for this Quarter Month 1 Tax liability for Month 1 Month 2 Tax liability for Month 2 Month 3 Tax liability for Month 3 Total liability for the quarter Maintain, Company Information Maintain, Company Information Pulls the year from the Payroll Tax Form Selector window. Will check the current quarter from the Payroll Tax Form Selector window automatically. Pulls the daily tax liability for Month 1 of the quarter Automatically calculated based on information printed. Pulls the daily tax liability for Month 2 of the quarter Automatically calculated based on information printed. Pulls the daily tax liability for Month 3 of the quarter Automatically calculated based on information printed. Automatically calculated based on information printed. Page 9 of 9