941 not filed

[brettascott]

Hello,

I have used your products for 15 or so years and am very satisfied with my experience.  A couple of weeks ago I received a form from the IRS that said "I didn't file a 941 tax return for the tax year ending on March 31, 2018".  I need to file this or inform them why I don't have to file this, no later than September 18, 2019.  I am contacting you because I have looked over my previous 4 years or so, and I noticed that your program has never filed a 941 for me.  I am a sole Proprietor and typically pay all of my taxes at the end of the year and deal with the penalty rather then pay quarterly.  I have had 1 employee for those years and have reported all of the payroll on Turbo Tax.  Do I need to file a 941?  if not, what is the reason that I can pass on the IRS?  If I do need to file one, why has it not been filed when I use Turbo Tax in the past?  I assume that if I need to file this form, then it is just a matter of filling out the form and sending it in, but the payment was calculated in the amount that your program informed me that I owed to the IRS.  Is that correct?  

Thank you,

Brett Scott

[email address removed]

[tagteam]

The following FAQ (link below) will provide you with information on Form 941.

https://turbotax.intuit.com/tax-tips/small-business-taxes/what-is-the-irs-form-941/L4mA9LHER

TurboTax does not support Form 941. You need to prepare and file the form manually (along with payment).

See https://www.irs.gov/forms-pubs/about-form-941

[Critter]

Since you had an employee you had to file quarterly payroll tax reports (form 941) and an annual report form 940 plus any other payroll tax reports like FUTA/SUTA.

So is the IRS looking for just the form 941 for the PAY PERIOD ending on March 31, 2018 ? If so send them a copy of that form they are missing.

[Lisa995]

If you've had an employee all these years you would be filing Form 941 each quarter and paying in the payroll taxes each quarter as well.

Form 941 is not part of the income tax return or program, you would need to be using Quick Employer Forms to prepare the 941 forms each quarter, and the annual 940 at year end, as well as any state payroll reports required on a quarterly basis as well.

Year end you also file a W3 along with the W2 to the IRS and of course issue your employee the W2 as well.

"but the payment was calculated in the amount that your program informed me that I owed to the IRS"

Which payment are you referring to?  What you pay along with your 1040 tax return filing is NOT related to the 941 employee payroll taxes.

[tagteam]

I do not believe Quick Employer Forms supports Form 941 (or 940). You need to be using payroll software for that (e.g, QuickBooks w/Payroll).

[Kat]

As mentioned in prior responses, you should have been filing Form 941 each quarter for as long as you had an employee, assuming that this employee is paid via W-2.  If you paid your employee as contract labor, you would have issued a 1099-MISC each year to this employee.  In that case, you wouldn't be required to file Form 941.  Form 941 deals specifically with employer withholding of income taxes from the employee's pay, then submitting it quarterly to the IRS.

I've filed for years as bookkeeper for my husband's sole proprietorship using the IRS form provided on their website.  It is form-fillable, and can be printed, signed and mailed to the appropriate address at the IRS.  I found that to be the simplest method.  I'm linking Form 941, and instructions, below.

https://www.irs.gov/pub/irs-pdf/f941.pdf

https://www.irs.gov/pub/irs-pdf/i941.pdf

[Lisa995]

I didn't realize that QEF doesn't include the payroll quarterly reports, my mistake.

So if you have an actual "employee", not a subcontractor, and you haven't been using some other payroll reporting software or filing the reports on paper yourself, you've got a big mess to clean up.  You may want to enlist the help of a tax professional that can help you get this all straightened out.

[brettascott]

So you are telling me that the Home and Business version of turbo tax does not calculate the expense from employees?  Why does it have business in the name then?

[Kat]

@brettascott TurboTax Home & Business is simply a tax preparation program for income tax returns.  The word, "Business" in the title indicates that the program is appropriate for self-employed individuals.  It can also be used by a single-member LLC.  

The program is for preparing your tax return and very little more.  You, as the business owner (self-employed, Schedule C filer) are responsible for payroll for your employees, withholding appropriate taxes from that payroll, filing required reports (both quarterly and annually) to the IRS and any state taxing authority.  

When using the TurboTax Home & Business software program, the taxpayer must enter the correct amounts into each field, including employee wages, and any other qualified business expenses associated with the business.

The IRS webpage linked below is a basic primer for self-employed individuals.
https://www.irs.gov/businesses/small-businesses-self-employed/self-employed-individuals-tax-center

See the linked IRS publication below for info on business deductions.

https://www.irs.gov/pub/irs-pdf/p535.pdf

[Lisa995]

"Home and Business version of turbo tax does not calculate the expense from employees?"

Home & business is for Income taxes, not Employee Payroll Taxes.

Did you issue your "employee" a W2 or a 1099MISC at year end?  If you gave them a W2, you needed to file quarterly 941 forms as well.

You may want to research "employee vs. independent contractor"  so you can understand the difference.

Employees are issued W2's and have payroll taxes (social security, medicare, fed and state withholding) deducted from their pay and the employer remits that to the government each quarter on 941 and whatever the equivalent form is for your particular state.

Independent Contractors are issued a 1099MISC and there are no payroll forms to remit to the government, since independent contractors are self employed people and pay their own self employment taxes (social security & medicare)

[DKarjane]

If you don't have QuickBooks w/Payroll, there's a great IRS-approved site for helping you complete and efile your payroll tax returns, https://paymellc.com/e-file  There's no login required. You just add in your data, review, and then pay them to efile if everything looks ok.