How to Calculate Form 941

There are specific directions available to complete Form 941.

Businesses have to file a quarterly Form 941 to the IRS if they have any employees. The 941 Form is how you report Social Security, Medicare and federal deductions from employees. The form is also used to report any earned income credit payments and any COBRA assistance payments you are making. Learn how to calculate Form 941 so that you send the right amount of money in with the completed form to the Internal Revenue Service.

Things You'll Need

• All withholding records for all employees
• Records of earned income credit and COBRA assistance payments
• Calculator

Instructions

1. Enter the correct information in Part 1. This is your personal information. In Part 1, enter the number of employees to whom you paid wages for the three-month time period for which you are filing (for instance, January to March or April to June).

2. Enter the total wages paid to all employees in this quarter on Line 2. Include tips and any other compensation. One Line 3, enter all federal taxes withheld. Do not include state on the 941 form.

3. Enter the total Social Security wages, tips and Medicare wages and tips on Lines 5a, 5b and 5c accordingly. After you enter the totals in Column 1, take that amount, multiply it by the number shown, and enter that total in Column 2. On Line 5d, enter the total from Column 2 in the box. Add Line 3 and Line 5d together, then enter on Line 6.

4. Enter any monies you have for line 7a, 7b and 7c, then total and enter on Line 7d. Add lines 6 and 7d together, and then enter on Line 8.

5. Enter any earned income credit advancements on Line 9. Then subtract Line 8 form Line 9 and enter that amount on Line 10.

6. Enter any payments you already made to the IRS for withheld taxes and any overpayments you may have made on Line 11. Then on Line 12a, enter any COBRA assistance payments and on Line 12b, enter the number of employees you have assisted with the COBRA assistance. Add Line 11 and Line 12a together and enter on Line 13.

7. Line 14 is for a balance due to the IRS and Line 15 is for any overpayment you may have made. Then answer the questions on Page 2 and sign.

Tips & Warnings

• Always total all employees' wages and deductions together for the Form 941.

• If you owe money, send a check along with the Form 941.

• Make sure to answer the questions on Page 2 before signing and sending to the IRS.

Resources

• Form 941