Form 944 is an IRS form for small businesses that allows employers who withhold $1,000 or less in income taxes annually to pay their taxes once a year instead of annually. This simplifies payroll taxes for small employers while still allowing them to remain compliant with federal tax laws.
How to Complete Form 944:
1. Download the form from the IRS.
You can download the most recent version of Form 944 here.
2. Enter business information at the top of the form.
It is important to fill out the top portion of the form correctly, particularly when it comes to entering your EIN (Employer Identification Number). The IRS will use this information to match the form to your tax file.
3. Answer questions in Part 1.
Part 1 of the form asks for information about taxes that you have withheld for your employees. You should have your accounting and payroll records handy so that you can enter accurate numbers for each line item.
4. Enter details about your tax deposit schedule.
Part 2 requires employers to enter details about the timing and amounts of their tax deposits. Again, all of this information should be available to you in your payroll records.
5. Complete Parts 3 - 5.
The remainder of the form has some basic questions about your business. In Part 4, you have the opportunity to identify a third-party designee who is authorized to discuss this matter with the IRS on your behalf. Employers may exercise this option if their taxes are managed by an accountant. Part 5 must include your signature for the document to be valid.
6. Submit the form with your business's tax return.
Form 944 must be submitted by or before the annual tax deadline. You can submit the form with your full tax return.
Who can file Form 944?
Any business that withholds $1,000 or less in taxes from employees on an annual basis is eligible for Form 944.
Do I need to file Form 944?
The IRS will send you a notification if you are required to file Form 944. If you are a new employer, you can file Form 944 if you expect to have less than $1,000 in employment tax liability for the year.
What is the difference between 941 and 944?
Form 941 is used to file an employer's quarterly tax return if they are not eligible to use Form 944.
What is the difference between Form 940 and 944?
The purpose of Form 940 is for employers to report and pay federal unemployment tax. Unlike Form 944, 940 can be used regardless of the size of the business and allows employers to opt for annual payments.
Do I have to file Form 944 if I have no employees?
Form 944 is not a requirement if you have no employees since you would have no withholding tax to report. There may be some exceptions if you had employees in the past, but in this case, the IRS would notify you of the requirement to complete the form.