Irs Form 941 - DOC - DOC

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Irs Form 941 - DOC - DOC Powered By Docstoc
					HRPYR: HR/PAYROLL PROCEDURES
PYR: PAYROLL
TAX: Taxes
20: Form 941, Employer’s Quarterly Federal Tax Return
Issued: 9/8/08; Revised:4/8/09




Table of Contents

GENERAL ..................................................................................................................................................................... 1
SCHEDULE................................................................................................................................................................... 1
DATA SOURCES .......................................................................................................................................................... 2
941 WORKSHEET FOR A QUARTER ......................................................................................................................... 2
  How to Complete the Worksheet .............................................................................................................................. 4
PREPARING THE FORM 941 AND SCHEDULE B ..................................................................................................... 5




GENERAL
The Form 941, Employer’s Quarterly Federal Tax Return, is used to perform a reconciliation (e.g. true-up) of the
total federal tax payments made by an employer during a quarter to the quarterly tax liability as calculated on the
Form 941. Any difference between the two is handled either as a credit on the next return (overpayment) or an
additional remittance to the IRS (underpayment).

Federal tax is the total of Federal Income Tax (FIT) withholding, OASDI tax (both employee and employer amounts)
and Medicare tax (both employee and employer amounts).

Tax payments and tax liabilities are not the same thing. A tax payment is the Federal tax amount (as defined
above) for an individual pay cycle (e.g. confirm) that is sent (remitted) to the IRS following the close of each pay
period. The remittance amount is the sum of the FIT, OASDI and Medicare amounts detailed on the US Payroll
Summary (PY4150018H) produced each pay period. A federal tax liability is the amount which the IRS determines
is owed for a given period of time; in this case, as calculated by the formula on the Form 941. This may or may not
be what was actually remitted during the quarter. When the sum of all pay period payments made during the
quarter is greater than the calculated liability, the difference can be applied to the next return or taken as a refund.
If the calculated liability is greater, then the difference must be remitted to the IRS.


SCHEDULE
The Form 941 is due by the end of the month following the last day of the quarter.

 OTR              ENDS                        DUE BY
  1              March 31                      April 30
  2              June 30                       July 31
  3            September 30                  October 31
  4            December 31                   January 31




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HRPYR: HR/PAYROLL PROCEDURES
PYR: PAYROLL
TAX: Taxes
20: Form 941, Employer’s Quarterly Federal Tax Return
Issued: 9/8/08; Revised:4/8/09

DATA SOURCES

Payroll Balance Sheet

The data contained on the Payroll Balance Sheet is used to complete the 941 Worksheet. See HRPYR-TX-WKLY-
10 for procedures regarding the Payroll Balance Sheet.

TX4150004, Multiple Worksite Report

Use to complete the number of employees line on the Form 941.


941 WORKSHEET FOR A QUARTER

The 941 Worksheet for A Quarter is used to collect the pay period wage and tax information that is necessary to
complete the Form 941 at the end of the quarter. The line numbers and line text replicates what is on the Form
941. The Worksheet contains 4 sections:

        One for each month in the quarter. Each month is divided into two pay periods. The wage and tax
                                                                                   st
         information for pay periods is entered into the pay period sections: the 1 pay period in the month in the
         first section and the second pay period in the month in the second pay period.
        One section for the quarterly information which will be placed on the Form 941. The quarterly data is a
         summary for the 3 months detailed on the same worksheet.

The Worksheet is constructed so that very little information needs to be entered manually.

        The pay period wage and tax information in each pay period section is extracted from the Payroll Balance
         Sheet by linking to the appropriate cells in the Payroll Balance Sheet.
        Various pay period and monthly totals as well as the majority of the totals for the Quarterly section are
         computed automatically based on formulae contained in the Worksheet.
        Several figures in the Quarterly section are linked back to totals for each of the months.

Consequently, the Worksheet is protected and many of the cells containing the data are locked to prevent the
formulae and links from being disturbed.

The following diagrams identify how each cell is set-up within each section. Only Line 11, Total deposits this
quarter…, in the For The Quarter section requires a manual entry.


Key: PBS = Payroll Balance Sheet

2 Payroll Ending Date Sections per Month
 PAYROLL ENDING DATE:              Link to PBS


 2. Wages, tips, and other compensation                                            2   Link to PBS


 3. Total income tax withheld from line 2                                          3   Link to PBS



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HRPYR: HR/PAYROLL PROCEDURES
PYR: PAYROLL
TAX: Taxes
20: Form 941, Employer’s Quarterly Federal Tax Return
Issued: 9/8/08; Revised:4/8/09



                                           Column 1                         Column 2
 5a. Taxable social security
 wages                                              Link to PBS   x.124              Calculated


 5c. Taxable Medicare wages                         Link to PBS   x.029              Calculated


 5d. Total social security & Medicare taxes (Column 2, 5a + 5c)                                   5d     Calculated


 6. Total taxes before adjustments (lines 3 + 5d)                                                  6     Calculated



1 Tax Liability Total section per Month
                             MONTH x
 Tax Liability                   (where x=1,2,3)                        Calculated


1 For the Quarter section per Quarter
                                           FOR THE QUARTER

 2. Wages, tips, and other compensation                                                            2    Calculated


 3. Total income tax withheld from line 2                                                          3    Calculated


                                           Column 1                        Column 2
 5a. Taxable social security
 wages                                             Calculated   x.124            Calculated


 5c. Taxable Medicare wages                        Calculated   x.029            Calculated


 5d. Total social security & Medicare taxes (Column 2, 5a + 5c)                                   5d    Calculated


 6. Total taxes before adjustments (lines 3 + 5d)                                                  6    Calculated


 8. Total Taxes                                                                                    8    Calculated


 10. Total taxes after
 adjustments                                                                                      10    Calculated


 11. Total deposits this quarter, including overpayment from prior quarter                        11   Link to PBS


 12. Balance due if Ln 10 more than Ln 11                                                         12    Calculated




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HRPYR: HR/PAYROLL PROCEDURES
PYR: PAYROLL
TAX: Taxes
20: Form 941, Employer’s Quarterly Federal Tax Return
Issued: 9/8/08; Revised:4/8/09


 13. Overpayment if Ln 11 more than Ln 10                                                    13                Calculated


                                                                                                        Linked to Month 1
 15. Tax Liability                                                       Month 1                            Total Liability


                                                                                                        Linked to Month 2
                                                                         Month 2                            Total Liability


                                                                                                        Linked to Month 3
                                                                         Month 3                            Total Liability


                            Total Liability for
                            quarter                                                                            Calculated



How to Complete the Worksheet
A Worksheet is created for each quarter in a given year. The 4 Worksheets for a year are filed in the folder for that year which
is maintained in H:\Payroll Process & Procedures\Taxes\941 forms. When beginning a new year, first create a new year’s
folder in that directory named for the year (e.g., 2008, 2009, etc).
           st
For the 1 pay period in a new quarter

 Step                                               Activity
           OPEN the Master Worksheet
   1       Location: H:\Payroll Process & Procedures\Taxes\941 forms\Master 941 Worksheet.xls

           SAVE AS Qtr X in the current year’s folder (H:\Payroll Process & Procedures\Taxes\941
   2       forms\[current year folder] where x is the current quarter’s number (1,2,3 or 4)

   3       Shrink the new Worksheet
           OPEN the Payroll Balance Sheet
   4       Location: H:\Payroll Process & Procedures\Taxes\Balance sheet\Master.xls

           Shrink the Balance sheet so that both the Balance Sheet and the 941 Worksheet are on the same
   5
           screen. This will make it easier to move between the two.
           LINK from the Payroll Balance Sheet to the 941 Worksheet:
                Payrolls                              Payroll Ending Date
                Total Income                          Line 2 Wages, Tips
                Federal Tax                           Line 3 Total income tax
                OASDI Wages                           Line 5a, column 1 Taxable social security wages
   6            Medicare Wages                        Line 5c, column 1 Taxable Medicare wages
                To perform the link:
                    1. Enter an equal sign (=) in the 941 Worksheet cell
                    2. Click on the Payroll Balance Sheet cell with the amount- a link formula to the Balance Sheet cell will
                         appear in the Worksheet
                    3. ENTER – the amount will appear in the Worksheet cell
                    4.
    7      SAVE AS in the folder and as the file used in Step 2 above


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HRPYR: HR/PAYROLL PROCEDURES
PYR: PAYROLL
TAX: Taxes
20: Form 941, Employer’s Quarterly Federal Tax Return
Issued: 9/8/08; Revised:4/8/09


                                                          st
For pay periods in the current quarter after the 1 pay period

 Step                                                 Activity
           OPEN the 941Worksheet for the current quarter
   1       Location: H:\Payroll Process & Procedures\Taxes\941 forms\ [yyyy]\[current quarter’s file]
           where yyyy = current year
   2       Shrink the new Worksheet
           OPEN the Payroll Balance Sheet
   3       Location: H:\Payroll Process & Procedures\Taxes\Balance sheet\Master.xls

           Shrink the Balance sheet so that both the Balance Sheet and the 941 Worksheet are on the same
   4
           screen. This will make it easier to move between the two.
           LINK from the Payroll Balance Sheet to the     941 Worksheet:
                   Payrolls                              Payroll Ending Date
                   Total Income                          Line 2 Wages, Tips
   5
                   Federal Tax                           Line 3 Total income tax
                   OASDI Wages                           Line 5a, column 1 Taxable social security wages
                   Medicare Wages                        Line 5c, column 1 Taxable Medicare wages
   6       Pay Date = date employee receive pay for the pay period

           If it is the end of the quarter and the final pay period section has been completed, proceed with the
   7
           next steps. If not, SAVE AS in the folder and file opened in Step 1 above
           At the end of the quarter

           COPY from the Payroll Balance Sheet to the 941 Worksheet:
   8
              Total Tax Deposits QTD                     Line 11a Total Tax Deposits
           OPEN the Form 941 for the prior quarter
   9       Location: H:\Payroll Process & Procedures\Taxes\941 forms\yyyy]\Qtr q 941.pdf
           Where yyyy = year and q = quarter number
  10       If Line 13 contains an amount, COPY the amount to Line 11b of the Worksheet
  11       SAVE in the folder and file opened in Step 1 above and leave the Worksheet Open.
  12       Prepare the Form 941and Schedule B


PREPARING THE FORM 941 AND SCHEDULE B

Location: H:\Payroll Process & Procedures\Taxes\941 forms\f941.pdf and
         H:\Payroll Process & Procedures\Taxes\941 forms\f941Sch B.pdf
                These are the preferred forms as the recurring information has already been completed. They
                should only be replaced when the IRS revises the form.
        or
        www.irs.gov >More Forms and Publications>Form and instruction number(PDF) – Enter 941 in the FIND
                 box and then select the most current version of the form 941 or Schedule B. All employer
                 information will have to be completed as well as the quarterly tax data.


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HRPYR: HR/PAYROLL PROCEDURES
PYR: PAYROLL
TAX: Taxes
20: Form 941, Employer’s Quarterly Federal Tax Return
Issued: 9/8/08; Revised:4/8/09

The Form 941 and the Schedule B are PDF forms which can be completed on screen and then printed. The Form
941 reconciles the tax deposits made periodically during the quarter to the tax liability as calculated on the Form
941. Schedule B details the individual pay period tax deposits as well as in total for the quarter. The total on the
Schedule B must equal the total shown on Line 10 of the Form 941.

The Form 941 is prepared using the data contained in the ‘For The Quarter’ section of the 941 Worksheet.
Complete the forms as follows:

Form 941

 Step                                                         Activity
           OPEN the Master Form 941 and shrink
   1
           Location: H:\Payroll Process & Procedures\Taxes\941 forms\f941.pdf
           SAVE AS
   2       Location: H:\Payroll Process & Procedures\Taxes\941 forms\ [yyyy]\f941 qtr#.pdf
           where # is the current quarter
           The current quarter’s 941 Worksheet should be open. If not, open and shrink it so that both the
           Worksheet and the Form 941 are displayed on screen.
   3
           Location: H:\Payroll Process & Procedures\Taxes\941 forms\ [yyyy]\[current quarter’s file]
           where yyyy = current year
           In the Report for this Quarter box, Point and Click on the box next to the number of the quarter
   4
           to make a check mark appear indicating the quarter months being reported.

   5       Go to Document Direct


   6       Open and print the TX4150004, Multiple Worksite Report

           Complete line 1 using the TX4150004, Company Total for last month of quarter (March, June,
   7       September, December)

           Enter lines 2 through 11 and line 15, Months 1, 2 and 3 from the Form 941 Worksheet, For The
   8       Quarter to the same corresponding line numbers in Part 1 (lines 2-11) and Part 2 (line 15) of the
           Form 941. The data cannot be copied because the decimal point on the Form 941 is fixed.
           The Balance Due and Overpayment amount are automatically calculated:
               Line 12, Balance Due is populated: If this amount is less than $1, then nothing is due.
   9              Otherwise, see the Balance Due section of the 941 Instructions on the IRS website.
               Line 13, Overpayment is populated (not zero): POINT and CLICK on the box next to ‘Apply
                  to next return’
  10       In Part 2 for line 15, click ON the box for the ‘You were a semimonthly depositor…’
  11       SAVE AS same location/file as in Step 2
           Open 941 Worksheet to full screen size and SAVE AS the 941 Worksheet in the same folder/file
   12
           name as was opened when starting the Worksheet preparation outlined above
  13       Prepare Schedule B



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HRPYR: HR/PAYROLL PROCEDURES
PYR: PAYROLL
TAX: Taxes
20: Form 941, Employer’s Quarterly Federal Tax Return
Issued: 9/8/08; Revised:4/8/09




Schedule B

 Step                                                         Activity
           OPEN the Master Schedule B and shrink
   1
           Location: H:\Payroll Process & Procedures\Taxes\941 forms\f941 Sch B.pdf
           SAVE AS
   2       Location: H:\Payroll Process & Procedures\Taxes\941 forms\ [yyyy]\Sch B qtr#.pdf
           where # is the current quarter
           Enter from the Worksheet, each individual pay periods’ Total Taxes amount to the appropriate
           month/day line on Schedule B.

   3       The appropriate month is the month of the pay period. The appropriate day is the ACTUAL PAY
                                 st
           DAY. That is, if the 1 payroll period of the first month of the quarter ends on the 15th and that is a
           Saturday, then the actual pay day is Friday, the 14th. Therefore, the Total Tax Deposit for the 7/15
           pay period is shown on the Schedule B in the first month’s section on line 14.

           Enter
   4
              Worksheet Total Liability for the Quarter line  Schedule B Total liability for quarter box

           Compare the Schedule B Total liability for quarter amount to the Form 941 Line 10 amount. If they
   5       are NOT equal, enter the difference on Lines 7a of the Worksheet and the Form 941. ENTER the
           recalculated line 10 amount from the Worksheet to the Form 941 line 10.

   6       SAVE AS same folder/file name as in Step 2

            PRINT
                    Form 941 (x2)
   7                Schedule B (x2)
                    941 Worksheet
                    Payroll Balance Sheet
  89       SIGN both copies of the Form 941
           Follow the 941 Instructions for making a payment if a BALANCE DUE amount is shown on the
   9
           Form 941.

  10       Mail one Form 941 and Schedule B to the US Treasury.

  11       Attach the TX4150004 to the copies from Step 7 and FILE




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Description: Irs Form 941 document sample