Payroll is a necessary part of most businesses, unless you are lucky enough to have great workers who refuse to accept payment. Along with the frequent paydays (whether that be monthly, semi-monthly, bi-weekly or weekly), you are also required to file quarterly payroll reports.
If you are scratching your head wondering what all must be done to fulfill this requirement, don’t worry! I’m here to help you with that!
You likely pay your payroll tax liabilities each month. For the Federal, you must pay this through the Electronic Federal Tax Payment System or EFTPS. One of the forms required to be filed quarterly is the Federal Form 941 (Employer’s Quarterly Federal Tax Return). On this form, you report the number of employees as of the 12th day of the last month within the reporting period. You also report the gross wages paid, the amount taken out for Federal withholding, the entire Social Security and Medicare liabilities, and the amounts of each monthly payment. When I state the entire Social Security and Medicare liabilities, this is done by taking the gross wages and multiplying by .124 for Social Security and .029 for Medicare. This includes the employer and employee portions of each liability.
If you are a semi-weekly scheduled depositor for the EFTPS, then you will also have to attach Form 941 Schedule B (Report of Tax Liability Semiweekly Schedule Depositors). This form is very simple to fill out. You simple must report when the liability for each payroll occurred.
If your state requires payroll taxes to be paid, then you will need to fill out your state’s Form 941 or its equivalent. Some states might have an online method of reporting this information. You will need to know the tax liability for the quarter for that state. If your state has a reciprocal agreement with a neighboring state, you will have to fill out multiple state withholding reports if you have employees that live in both states.
Now that you have completed the tax withholding reports, you will also have to fill out the state and Federal unemployment reports, also known as SUTA and FUTA. If you can do this online, you will likely not have to worry about doing any complicated math to find out what your liabilities are. State unemployment reports will need to be filed on a quarterly basis. You will need to have a list of every employee, regardless of where the employee lives, and their quarterly gross earnings. Then there will be an income requirement that must be met for each employee that the unemployment tax will be figured on. For example, you might have to pay the employee up to $12,930 before you will no longer need to pay unemployment on that employee. This is a per year total. You will need to check with your state’s department of employment services to know what that amount will be.
The last report that needs to be filed is the Form 940 (Employer’s Annual Federal Unemployment (FUTA) Tax Return) for the Federal unemployment. Until your liability reaches $500, you won’t necessarily need to pay this each quarter. This payment needs to be made through EFTPS. The actual report filed until the end of the year. This form looks complicated, but it truly isn’t that hard to fill out. Each employee’s unemployment tax is figured on wages up to $7,000 per year. Once you have the total of earnings (up to $7,000 per employee), you will multiply that figure by .006. The maximum Federal unemployment owed on any single employee will be $42.00. It is very important to understand that if your liability is over $500 at the end of the year, you should have made at least one payment through EFTPS. If you haven’t, you could be penalized by the IRS.
Most of the payroll reports will be due by the last business day of the month following the end of the quarter. So, for instance, if you have just completed the first quarter (which ends March 31), then your reports need to be filed by April 30. Your liabilities won’t necessarily be due at that same time, they still might need to be paid by the 15th of the following month, or April 15 according to our example.
There are always situations that vary from employer to employer that could alter some of this information. For instance, if you offer a Simple IRA, then that could affect the gross wages. So, just be conscientious of this when figuring out the various employment reports.
If you are still not comfortable doing your quarterly reports, it might be a better idea to hire someone who is knowledgeable of how this all works. You can always reach out to me as well. This is one of the many services that I offer. If you look at my website and you can’t see the exact service that you need from me, call me and I can give you a quote as to what it will cost. My website is www.crucialcollaborations.net. My phone number is 319.382.5168. I look forward to helping you succeed!