Hi, I’m Thomas, and I work for the IRS.
If you’re an employer, you probably know that you need to withhold federal taxes from your employees’ pay.
So, which tax form do you use to report these taxes to the IRS?
Form 941 or 944?
Well, the good news is that you may qualify to file the simpler form 944, especially if you only have one or two people working for you.
Better yet, if you qualify, you only need to file once a year.
Here’s how you determine which form to use.
When you apply for an Employer Identification Number, which you can do by going to irs.gov/ein, you will eventually come to a page where it asks you to describe your employees.
Where It asks, “Do you expect your employment tax liability to be $1,000 or less in a full calendar year, January through December?” if the answer is yes, click “yes.”
This means you can file Form 944 just once a year.
But, if you prefer to file quarterly, then click no, and you will then file Form 941 four times a year.
And of course, if your tax liability is more than a thousand dollars a year, then you need to check “no” and you must file Form 941 quarterly.
Later, you will receive a notice from the IRS containing your Employer Identification Number and confirming which form you need to file.
Be sure to file that form until the IRS tells you that you should file a different form.
Whatever you do, don’t file both Forms 941 and 944 for the same tax year.
Note that different rules apply if you have agricultural or household employees.
For more information, go to irs.gov/employmenttax.