File Quarterly and Annual Reports and Returns

Part 8 in an eight-part series on Becoming an Employer.

 Part 1: Becoming an Employer
 Part 2: Apply for an Employer Identification Number (EIN)
 Part 3: Get Insurance: Business and Workers’ Compensation
 Part 4: Choose How to Handle Your Payroll
 Part 5: Start Hiring Employees
 Part 6: Complete Required Paperwork for New Hire
 Part 7: Make Payroll Tax Deposits
 Part 8: File Quarterly and Annual Reports and Returns

describe the imageQuarterly Filings

Form 941
Once each quarter, you must file Form 941 with the Internal Revenue Service. This form is a reconciliation of the tax deposits you’ve made for the quarter. If your payroll taxes are calculated correctly, you should not owe a balance. You can find the current form on the IRS website.

SUTA
State unemployment tax is generally filed and remitted quarterly either online or on a tax agency pre-printed form. This filing typically requires byemployee wage detail for the quarter. Most states only collect SUTA on each employee’s wages up to a statutory wage limit (similar to the $7,000 FUTA limit mentioned in Part 7 — Make Payroll Tax Deposits).

State (SIT) and Local Income Tax
State and local income tax rules vary greatly and are beyond the scope of this discussion. Contact your state and local jurisdictions for more information.

Annual Filings

Federal Unemployment Tax and Form 940
If you pay wages of more than $1,500 in any calendar quarter, you’re required to file the Annual Federal Unemployment Tax Return, Form 940, and pay FUTA tax on the first $7,000 you pay for each employee. This tax contributes to a fund for workers who have lost their jobs. For more information, visit the IRS website.

Annual W-2/W-3
You are required to give each employee a W-2, the Wage and Tax Statement that shows the employees their annual taxable wages and the taxes you withheld, by January 31st of the following year. Your employees will examine the W-2s and if correct, will file with their income taxes.

You will also report these wages and taxes to the Social Security Administration by filing Copy A of the W-2 along with Form W-3, the Transmittal of Wages and Tax Statements. Form W-3 summarizes all W-2s that you issued to your employees, and is due at the end of February. For more information, read our article “What is a W-2?

Many states and municipalities also require a set of W-2s to be sent to their offices for internal reconciliation purposes. Usually at the end of calendar year, the taxing agency provides a reconciliation form to accompany the W-2s, and the due date often coincides with the federal deadline.

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