APRIL 15TH, 2008
By CPA SAM
Q. Where do I send my Quarterly 941 form? Does it go to the bank?
A. The Form 941 is for employers to report the amount of federal, Social Security and Medicare tax withheld from employees for the quarter. If your company uses a payroll service, filing this form should be part of the package and either prepared or filed for you. If you are processing payroll on your own, the IRS should have included instructions with the 941 form. These instructions will help you complete the fields on the form. They will also provide filing addresses.
My company has filed electronically for so long, that I am a little out of touch with the paper procedures. However, in the old days before we electronically filed, an envelope was included with the 941 package. This envelope had two labels attached. One was to be used if you were returning this form with money enclosed. The other was to be used if you already made your deposits at the bank or through EFTPS and were just returning the completed form.
If you lost the envelope, the instructions tell you where to mail the completed form starting on page 4. In case you don’t have the instructions, you can download a copy here.
MARCH 24TH, 2008
By CPA SAM
Q. What’s the difference between a W-2 and a W-4?
A. Through my tenure on the IRS IRPAC advisory group, I have learned one great rule, there are thousands of abbreviations and acronyms thrown around the government. Just in payroll there are so many of them that is hard for someone who works in that field to keep them straight, let alone those who are regular employees. You have the W-2, the W-4, the 1099, the I-9, 941, 940, 94X, 2678 and the list goes on. As time goes on, I hope to decode what some of these forms are used for in the payroll world. This is the first issue in that (probably very long-running) series.
Employers use the W-2 to report annual wages paid to their employees. If you have more than one job, you will receive one W-2 per employer. The numbers in those boxes are used by your tax preparer to determine your tax liability. If you are in the company 401(k) or pre-tax medical plan, the gross wage boxes will likely be different. This is ok.
Employees use the Form W-4 to report allowances and filing status to their employer. The numbers you submit will be used by your employer to determine your withholding amounts for Federal income tax only. Social Security and Medicare are calculated as flat percentages and are not affected by your filing status. The Form W-4 is your best tax planning tool. If you work with your CPA or tax adviser on completing this form correctly, you can minimize extra tax due and minimize the refund you receive at the end of the year. Whenever a major life change occurs, make sure you adjust your W-4 values accordingly as quickly as possible.
While they both start with W’s, they have distinctly different uses. Using the correct terminology will make your communication with the payroll department much more efficient and less confusing.
