What’s the Difference Between IRS Form 941 And IRS Form 944?

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Most employers use one of two main documents for reporting payroll taxes that have been withheld from workers’ wages. Known as IRS Form 941 and IRS Form 944, these documents may seem virtually identical at first glance. Understanding their differences is key to staying out of trouble with the IRS when handling payroll taxes.

Quarterly Vs Annual

The main distinction between IRS Forms 941 and 944 involves how often wages and taxes are reported. Form 941 is officially known as the Employer’s Quarterly Federal Tax Return — so under this approach, reporting occurs four times per year. With Form 944 — the Employer’s Annual Federal Tax Return — this obligation is limited to just once per year.

Due dates are also worth considering. As an annual submission, Form 944 is always due on January 31st. Form 941 is, in most cases, due on the last day of the month after the quarter ends. This will be April 30th for quarter 1, July 31st for quarter 2, October 31st for quarter 3, and January 31st for quarter 4.

The IRS Decides

If you’re hoping to choose between IRS Forms 941 and 944, you’re probably out of luck — the IRS is in charge. In most situations, employers will automatically file Form 941, unless instructed otherwise. Typically, only the smallest companies — with liabilities of under $1,000 — will be able to file IRS Form 944.

When you’re first launching your business, you may be able to request Form 944 as you obtain your Employer Identification Number (EIN). If you take this approach, you’ll need to make it clear that you anticipate an employment tax liability of under $1,000.

As you deal with the complications of business payroll tax obligations, don’t hesitate to get an expert in your corner. Our team at the Highland Tax Group can provide in-depth insight so you understand exactly what to expect — and how to avoid trouble with the IRS. Reach out today to get started.