Penalties for Completing IRS Form 941 Late (Or Not At All)

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As a business owner, you may struggle to keep up with the myriad of obligations you hold to the IRS. From forms to withholdings, and sometimes, fines, it’s a lot to manage. IRS Form 941, in particular, tends to fall through the cracks. This quarterly form outlines taxes withheld on employees’ behalf, but all too often, employers fail to file on time. Many fail to file Form 941 at all. This failure can lead to harsh penalties, as outlined below:

Fees for Filing Late

Form 941 penalties can vary considerably based on how late you file. Late deposit penalties can range from just two percent to over fifteen percent. However, if you have deposited all required taxes on time, you may enjoy an extension of up to ten days to file penalty-free. In select cases, the IRS may invoke the Trust Fund Recovery Penalty (TFRP), which equals the trust fund tax’s unpaid balance.

Other Penalties

While the threat of penalty is typically enough to convince employers to file Form 941 on time — or as soon after the deadline as possible — other penalties may arise for those who continue to neglect quarterly tax obligations. For example, the IRS has been known to place liens on the property of business owners who do not properly collect payroll taxes or complete Form 941. Liens can be assessed on either business or personal property.

Remember, IRS Form 941 is due the last day of the month after the quarter draws to a close. The sooner after the quarter’s end you gather essential information and complete the form, the better. Even seemingly modest penalties can add up quickly to create a huge burden for your business.

Don’t let your struggles with IRS 941 doom you with late filing penalties. The team at Highland Tax Group can assist you with the most complicated aspects of this essential tax document. Reach out today to learn more about our tax services.