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As a business owner with employees, completing and submitting the appropriate payroll forms is an important aspect of running your business. There are many payroll forms that must be filed, and many must be filed quarterly or annually to avoid taxation problems and penalties. Following is a list of the various forms you may need your accountant to file and an explanation of each.
Important Payroll Forms
Each payroll form has a purpose. To file them accurately, your accountant needs to have a clear understanding of your business, and as the business owner you should initiate these discussions. Forms vary by business type, location, and organization size.
Employer’s Quarterly Federal Tax Return (form 941) reports wages, social security, and Medicare taxes. If you are filing a Form 944, a form 941 may not be necessary.
Important filing dates for each quarter for form 941:
Employer’s Annual Tax Return (form 944) used to report wages, social security, and Medicare taxes by small businesses. To ease their burden, states allow small businesses to file federal income taxes once a year. Only certain businesses are allowed to file Form 944.
Due date – January 31
Federal unemployment (FUTA) tax (form 940) is used to report and pay unemployment taxes. If you pay wages of $1,500 or more and had at least 1 employee for 20 or more weeks of the year, you should file this form.
Wage and Tax Statement (form W-2) is used to file the income earned by each employee and to identify pending taxes for the year. This should be filed for all the employees to avoid penalties.
Form W-2 processes with multiple copies, including:
Transmittal of Wage and Tax Statements (form W-3) includes employee wage and tax information. This form is sent along with form W-2 to show the summary of employee’s earnings and taxes.
These forms should be completed by all employers who offer health insurance to their employees.
In addition to the above forms, you should report and pay state and local taxes.
There are many responsibilities when it comes to business taxes. In addition to all the above forms, tasks can become overwhelming. To ease your organization’s payroll management, you may want to consider using payroll automation software or outsourcing payroll services all together.
Benefits of Outsourcing
To avoid mishaps, work with your accountant to complete all the tax forms before due dates. Also, consider using payroll software and outsourcing payroll functions for automation and cost-effective solutions. Business Partnerships play a key role for small businesses, and it is advisable to partner with a reputable CPA or accounting outsourcing partner to assist with financial tasks.
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