To fill out Form 944 for 2024 Employer’s Annual Federal Tax Return:
- You need IRS Form 944 for 2024.
- Your payroll record for 2024.
- IRS Instructions for 2024 Form 944.
How to fill out Form 944 for 2024?
Form 944 Business Information
Add your business name you used to apply for EIN on the Line “Name”.
Look at your EIN application form if you made a copy of it. The name you put on your EIN application form on the line “business legal name” is your business name to enter on Form 944 Line “Name”.
If you are sole Proprietor, that will be your own name.
If you are an LLC taxed as an S Corporation and you put your business name as the business legal name on the EIN application form, that name will be the business name to enter on Form 944. You enter that name on page 2 and page 3 on top as well as the business EIN.
If your business has a trade name (Doing Business As), you enter that DBA name on the Line “trade name”.
Form 944 Part 1
Line 1
Enter on line 1 total wages tips and officer compensations paid to employees and officers during the tax year.
If you are not using a payroll software, you could use a spreadsheet to track your business payroll if you don’t have a lot of employees. We have at least 2 payroll spreadsheets in our Free Downloads on www.ninasoap.com you can download for free to use if you don’t have time to design your own. You could customize it to fit your business model as well. You can access the link to the Free Downloads at the end of the article or in the side bar of the website.
Pull your payroll spreadsheet and add your total wages paid during the calendar year, on line 1 of form 944.
Line 2 Federal income tax withheld
If you withheld income tax from your staff and officers’ wages, the total would go on line 2. If you didn’t withhold any income tax for the feds, the amount is 0. You leave line 2 blank.
Line 3 If you paid $0 wages.
If you didn’t pay wages or compensation during the year, you may not have social security or Medicare tax. Therefore, check the box on line 3. Leave line 4 alone and go to line 5.
If you paid wages or compensations, do not check line 3. Go to line 4.
Form 944 Line 4 Social security and Medicare tax
The social security tax is 6.2% for each employee and 6.2% for the employer for a total of 12.4%.
On each employee you withhold 6.2% from the wages until the employee salary or wages for the year reaches the social security wages threshold. The social security wages ceiling can vary each year. You can read more on it in the instructions to form 944 around page 9.
You stop collecting social security tax from that employee’s wages when that employee’s wages reach that ceiling. And your business doesn’t pay 6.2% on the salary exceeding that threshold for that employee either. But you continue to withhold income tax and Medicare tax on the whole year wages even if social security stops at its threshold for that employee.
Line 4a Total wages subject to social security
Enter the portion of line 1 total wages and officers’ salary that is subject to social security tax. If the total amount on line 1 is subject to social security tax, add that amount on line 4a column 1.
Calculate the social security tax and enter the amount on line 4a column 2. It is the amount on line 4a column 1 x 0.124. That is both employee and employer social security tax. You could design your payroll spreadsheet to do the calculation for you.
If you have sick leave pay and family leave pay, you complete 4a (i) and 4a (ii) column 1 and put the tax in column 2. The social security tax on sick leave and family leave pay is withheld from the employee wages. The employer doesn’t match it. Therefore, the social security tax on sick leave and family leave pay is 6.2%. If you don’t have qualified sick leave and family leave pay, leave 4a (i) and 4a (ii) lines blank.
Line 4b tips
If you paid tips you need to withhold 6.2% from employees’ tips and the employer pays 6.2%. You enter tips subject to social security tax on line 4b column 1. You time the amount by 0.124 and enter the social security tax for both employee and employer on 4b column 2.
Note that the tips to enter on line 4b should have been included on line 1 total wages, tips, and compensations. If your employees didn’t earn tips, leave line 4b blank.
Line 4c Medicare tax
Enter the total wages, officers’ compensations, tips, sick leaves, family leave pay on line 4c column 1.
As a business owner, you withhold 1.45% from employees’ wages for Medicare tax and your business pays 1.45% for Medicare tax on all employees’ wages for a total of 2.9% Medicare tax (employee and employer shares combined).
Take 4c column 1 amount and multiply by 0.029 and enter the result on 4c column 2. Your payroll spreadsheet should calculate it for you but do double check your numbers for accuracy.
Line 4d Additional Medicare tax
If an employee or officer salary exceeds $200,000 at any point during the year, your business needs to start withholding an additional 0.9% of Medicaid tax in addition to 1.45% from that employee’s wages for the rest of the year. Your business will only contribute 1.45% on Medicare tax on all that employee’s wages. Your business is not required to paid additional Medicare tax. Only the employee pays that.
It is good to design your payroll spreadsheet to track the cumulative of wages paid to each employee in your business. One of our free payroll spreadsheets is a little elaborate and could help track your employees’ income but please make sure the formula in the spreadsheet is not broken and is calculating your numbers for you as you will expect. You can access the payroll spreadsheet in the Free Downloads section in the website side bar.
Our free payroll spreadsheet is not suited to record payroll for employees earning salaries above the social security wages threshold.
If no wages are subject to additional Medicare tax, leave line 4d blank. But if there are employees that earned more than $200,000 during the year the total for each employee over the $200,000 should go on line 4d column 1. The 0.9% tax calculated on 4d column 1 will go on 4d column 2.
Line 4e total social security and Medicaid Taxes
Total social security and Medicare taxes from column 2 and add the amount on Line 4e.
Line 5 Total employment tax before adjustment
Total federal income tax withheld on line 2 and total social security and Medicare taxes from line 4e. Put that total amount on line 5.
Line 6 tax adjustments
If the social security tax and Medicare tax withheld from employees’ income are a little different from what you are supposed to withhold based on Line 4a to line 4d on form 944 because of rounding, make that adjustments on line 6. The adjustment could be a positive number or negative number to match what you withheld and what to report on line 4a to line 4d. The adjustment is for the current year you are filling for. If you need to adjust prior year Form 944, you need to complete Form 944-X to make that adjustment.
If you don’t have any adjustment to make on line 6 leave it blank.
Line 7 total tax after adjustments
Total line 5 and line 6.
Line 8 nonrefundable credits
If you are eligible to claim a credit, you can read IRS Instructions for Form 944 page 14 to 16 to see how to complete line 8a to line 8g.
If you are not claiming a credit, leave line 8a to line 8g blank.
Line 9 Total tax after nonrefundable credits
Subtract line 8g total nonrefundable credits from line 7 total tax after adjustments.
If you don’t have any tax and line 7 and line 8g are blank, on line 9 you put 0 on the dollar section and 00 on the cents section. Do NOT leave line 9 blank. Put 0 there on dollar and cents spots.
Line 10a Deposits
If you made employment deposits during the year, or if you didn’t claim a refund from the prior year overpayment but prefer to apply it toward the next tax return, enter the total on line 10a. If you didn’t make any deposits, leave line 10a blank.
Line 10d to Line 10h Refundable credits
If you are eligible to claim a credit read Instructions for form 944 page 17 for more information. If you didn’t claim any credits and you didn’t make any deposits, leave lines 10 blank.
Line 10h is the total of all the lines 10.
Line 11 Balance
If you made deposits and entered the total on line 10a but didn’t claim any credit, your line 10h will be the same as line 10a. Subtract your tax liabilities on line 9 from your deposits and refundable credits line 10h.
If your tax on line 9 is more than your line 10h total deposits and refundable credits, you will owe tax. That difference will go on line 11 Balance due.
Line 12 Refund
If line 9 total tax is less than line 10h total deposits and refundable credits, you are owed a refund. You put that difference between line 9 and 10h on line 12 when line 10h is more than line 9. You then check the box whether you want to apply the refund toward the next return or receive a refund.
Form 944 Part 2
Line 13
If your Form 944 line 9 is less than $2,500, check the 1st box on line 13 and leave the rest of line 13 alone and go to Part 3.
If, however, your line 9 total tax is $2,500 or more, you must check the 2nd box on line 13 and then you complete Line 13a to 13l. Line 13m is the total of line 13a to line 13l. Your line 13m should equal to your line 9 total tax after adjustments and nonrefundable credits.
If you are semiweekly depositor, you are required to complete Form 945-A and attach it to your form 944 instead of completing line 13a to line 13l. You can find the link for Form 945-A and its instructions on our blog “IRS Tax Forms and Instructions” in the side bar.
Form 945-A allows you to report your daily employer tax liability.
Our free payroll spreadsheet is not suited for you if you are a semiweekly depositor.
It is suited for monthly schedule depositor as it can summarize your data into monthly and quarterly reports.
If you need to complete line 13a to line 13l, you enter your monthly tax liability based on the wages you paid to your employees every month. When you paid wages is when you incurred the tax liability. Don’t add your tax deposited amount on line 13a to 13l. It is your tax liability based on how much you paid in wages every month.
Form 944 Part 3
Type your business name and the business EIN number on top of page 2 and 3.
Line 14
If you closed your business, you would complete line 14 with the information requested. Otherwise, leave it blank.
Line 15 to Line 24
If you offer health insurance and sick leave pay, then you could read IRS instructions Form 944 page 20 to page 21 and complete Line 15 to Line 24 if applicable to your business.
If Part 3 is not applicable to your company, leave it blank and go to part 4.
Form 944 Part 4
If you want an employee of your company or the tax preparer to answer IRS questions related to form 944 on your behalf, you can check the box “yes”. Then you complete that section with the person’s information. If you want to be the one to answer IRS questions regarding the form if they have questions, then check the box “No” and go to part 5.
Form 944 Part 5: Who can sign Form 944 for your business?
After you completed Form 944, type your name and your title in Part 5 or the name of the person that will sign the form if you are not the owner of the business.
After you printed the form out, sign it and date it or let the person that will sign it do so.
When Form 944 is due?
File Form 944 by January 31.
Conclusion: How to Fill out IRS Form 944 for 2024 Employer’s Annual Federal Tax Return
To fill out form 944 for 2024, download the form and its instructions, pull your payroll record for 2024 and complete form 944. Mail it to IRS by January 31st.
The video explains step by step with an example of how to fill out Form 944 for 2024.
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