IRS Smplifies 941
If you've been preparing or even just signing quarterly employment tax returns for awhile, you probably recognize IRS Form 941. Also known as the Employer's Quarterly Federal Tax Return, this is the form used to report wages, tips and other compensation, as well as federal tax withheld and Social Security and Medicare tax due.
Recently, the IRS gave Form 941 a face lift. The tax agency found an abundance of mistakes made on the form by employers across the country. That's why the Office of Taxpayer Burden Reduction turned its spotlight on Form 941 in an attempt to make it more user-friendly. Beginning with the first quarter of 2005, the old, familiar quarterly report was replaced with a new, "easy on the eye" form.
The goal is to reduce: 1. The time required by preparers to complete the form. 2. The number of common errors, many of which can lead to penalties. Each year, 23 million 941 forms are filed by 6.6 million employers. The redesigned form has an improved layout, including shading and larger boxes. In addition, the new form is scannable, which should help reduce transcription errors. Plus, the instructions have been rewritten in plain language and are included on the form instead of in a separate leaflet.
Whether you prepare payroll yourself or outsource the job to payroll professionals, these changes are good news for business