IRS Form 944 - Community Tax

What is Form 944

IRS Form 944 is not a well-known form. Many small business owners struggle to understand which payroll form they must file and when and need IRS help. If you’re a small business owner and you pay less than $1,000 in payroll taxes (federal income tax, social security, and Medicare withheld from employees) then you may qualify to pay your federal tax returns annually instead of quarterly. This form was intended to give small business employers a break when it came to filing and paying federal payroll taxes. The other reason for Form 944 is to save the IRS man-hours and funds by simplifying the process for all parties involved.

How do you know if you are required to file IRS Form 944? In most cases, the IRS will notify you if your business should be filing this form. They usually send notification if the amount owed in employment taxes over the course of the previous year was less than $1,000.

Form 944 vs 941

Typically, a business will file IRS Form 941 (the employer’s quarterly employment tax return). The IRS form 944 takes the place of Form 941 if a small business qualifies. All employers are required to hold their employee’s FICA (Medicare and social security) and income taxes that they will pay on a quarterly base to the IRS. Tax liability falls on the employer rather than the employee. IRS Form 944 becomes the mechanism to pay these taxes, taking the place of the IRS form 941. This form additionally includes information on Medicare tax that is withheld from high-cost employees.

Who Qualifies for this Form

If you would like to file Form 941 instead of 944, you will need to call the IRS or send a written letter. This will need to be taken care of at the beginning of the year so the IRS has time to assess if your business qualifies and implement the changes to your file. If you employ only household or agricultural employees you will not qualify to file Form 944. Don’t attempt to file tax Form 944 if the IRS hasn’t already explicitly stated that you qualify to do so. Your form will be rejected if you don’t already have approval.

How to File Form 944

You will need to fill in information about employee’s federal income tax information’s and make sure the amount is correct. Be sure to include your EIN, business name, trade name, and address. The rest of the form is fairly straightforward and specific; take your time to fill in each box and ensure all information is accurate.

What if you see that you owed $1,000 or less last year in employment taxes but the IRS has not notified you that you can file IRS Form 944? As a small business owner, you can also call the IRS and request that they change the employment filing requirements that they have on file for you so that you may file this form. You have to call them between January 1st and April 1st of the tax year in which you want to change your businesses filing requirements.

If it is determined that your business should file an annual employment tax return, IRS Form 944 must be filed by January 31st of each tax year. When you file this form, you have to pay the entire amount of the accumulated liability with the return.

Where to Mail Form 944

Your Form 944 can be mailed to your states IRS office. You can find your states local IRS office by going onto IRS.gov or contacting a tax professional who can better walk you through the process of filing this form. You can also file Form 944 online or use a third party to e-file as well.

If you’re a small business owner and you want to know if your business will make it through the form 944 filter, don’t hesitate to contact one of our tax professionals. We have helped many small businesses simplify their quarterly taxes and reduce tax-related stress.