Form 944 is a federal tax return for employers to report their Social Security, Medicare taxes, and income tax withholding. It allows small employers to pay yearly instead of quarterly. Employers with $1,000 or less in liability use Form 944.
Filing Frequency: Form 944 vs. Form 941
The difference between Forms 941 and 944 is filing frequency. Small businesses file Form 941 quarterly; Form 944 is annual. The forms report the same information: employee wages and withheld income and payroll taxes.
Calculating and Filing
Use Form 944 to calculate tax liability for the year by following step-by-step instructions. The formula has 3 parts:
- Income tax withholding: Employee’s tax rate x total wages paid
- Social Security tax
- Medicare tax
Calculate totals owed for the year on wages, tips, compensation. File by January 31st. Consider getting help from a tax professional.
File Form 941 quarterly to report wage and tax information. Enter 0 if no taxes to report. Do not send Form 941 if you filed a final return, are a seasonal employer, or handle farm/household employee payroll.
Any LLC with employees will need to file Form 940 and Form 941 or Form 944. If tax liability for your household employee exceeds $1,000 for the year, file Form 941 quarterly instead. Consider getting help from a tax professional.