How to Figure Federal 941 Taxes

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Employers use the 941 federal forms when they have employees with withholdings from their earnings. Knowing how to figure federal 941 taxes is important, because if the figures you arrive at are incorrect, you could have some trouble with the government. The forms are a way to report what you withheld from employees' checks for federal taxes, Social Security and Medicare. Employers use the form to report their share of Social Security and Medicare, as well as and any advanced earned income payments. Employers must file a report every quarter, even if there are no taxes to report for that quarter.

  • Calculate all wages for your employees. These include tips, wages and any other compensation. Then report all federal tax withheld from employees. If you are using the federal 941 tax form, fill out Line 2 with the total wages, other income and tips, and Line 3 with the total federal taxes withheld. Line 1 of the form is the number of employees you are reporting for the specific quarter.

  • Enter the taxable Social Security wages on Line 5a, Column 1. This is the total amount for all employees. Then multiply the wages from Column 1 by .124 and enter that amount in Column 2. Next, enter any Social Security tips on Line 5b in Column 1. Then multiply that number by .124 and enter the total in Column 2. On Line 5c, enter the taxable amount of wages for Medicare and any tips. Multiply Column 1 by .029 and enter that amount in Column 2. Add Column 2 Line 5a, 5b and 5c and enter that total on Line 5d.

  • On Line 6 of the federal 941 tax form, add Line 5d to Line 3 and enter that total. If you have any adjustments for insurance, tips, sick pay or fractions of cents, enter the totals on Line 7a, 7b and 7c. Then total the adjustments and enter on Line 7d. Add Line 6 and 7d and enter on Line 8.

  • Enter any advanced earned income credits on Line 9. Then subtract Line 8 from Line 9 and enter that total on Line 10.

  • On Line 11, enter any deposits you made for this specific quarter with any overpayments applied from a prior quarter and from any 944-X or 941-X form you filed. If you had any COBRA assist payments, enter them on Line 12a. On Line 12b, enter the number of people you are reporting for COBRA assist. Add Line 12a and 11 and enter the total on Line 13.

  • Find your balance due or an overpayment on Line 14 and 15. If you have a balance owed to the federal government, enter this amount on Line 14. if you have paid too much for the quarter, enter that amount on Line 15. Figure the balance you owe if Line 10 is more than Line 13. Figure your overpayment if Line 13 is more than Line 10.

Tips & Warnings

  • Remember to include every employee in the 941 quarterly reports.
  • If yours is a smaller company, you might not have to prepay quarterly, so you will have to keep all federal tax withholding, Social Security and Medicare withholdings in the bank.
  • Have your portion of the Social Security and Medicare taxes available if you did not prepay during the quarter.

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