If you file Form 941 Employer Quarterly Federal Tax Return for your business, at the beginning of the calendar year, you need to determine which payroll tax deposit schedule you will choose for the whole year.
There are two deposit schedules: monthly deposit schedule and semiweekly deposit schedule.
If you incur a tax liability on Form 941 (Line 12 total tax after adjustment and nonrefundable credits) including social security tax withheld from employees salary, Medicare tax withheld from employees salary, federal income tax withheld from employees salary, social security tax paid by the employer, and Medicare tax paid by the employer that is less than $2,500 for the quarter, you can deposit the tax liability or pay it with your form 941 for that quarter.
How to choose your payroll tax deposit schedule for 2024 if you file IRS Form 941?
To choose your payroll tax deposit schedule, you total your Forms 941 Line 12 total tax after adjustment and non-refundable credits for 4 quarters from July 1st, 2022, to June 30, 2023. That will include:
2022 Form 941 Q3 Line 12 (July, August, September)
2022 Form 941 Q4 Line 12 (October, November, December)
2023 Form 941 Q1 Line 12 (January, February, March)
2023 Form 941 Q2 Line 12 (April, May, June)
Monthly deposit schedule
If the total liability on Forms 941 Line 12 Total tax after adjustments and non-refundable credits for the 4 quarters cited in the above section, is $50,000 or less, you choose monthly deposit schedule.
If you choose monthly deposit schedule, you should track your payroll tax on a monthly basis as Form 941 Line 16 requires you enter your quarter tax liability broken down by month.
If you are looking for a free payroll spreadsheet to track your payroll tax liability by month and by quarter, there is “Free Payroll Spreadsheet-Form 940-B22F2 Rev1” in the free download section you can download.
Semiweekly deposit schedule
If the total liability on Forms 941 Line 12 Total tax after adjustments and non-refundable credits for the 4 quarters cited above is more than $50,000, you choose the semi-weekly deposit schedule.
More details can be found on IRS Instructions for Form 941 around page 8 or IRS Publication 15 Employer Tax Guide Section 11.
If at any day of the year you incur $100,000 tax liability, you make the deposit the next day and switch to semi-weekly deposit schedule if you are a monthly schedule depositor and remain semiweekly schedule depositor for the rest of the year.
A semi-weekly schedule depositor should track payroll and payroll taxes daily. There is Schedule B Form 941 that is required to attach to Form 941 if you are a semiweekly schedule depositor.
How to make your monthly deposit?
If you are a monthly schedule depositor, deposit your employment tax liability incurred the prior month by the 15th of the current month. For instance, you deposit January employment tax by February 15th.
Make your tax deposit via EFT (Electronic Funds Transfer) using EFTPS.
You can sign up with EFTPS (Electronic Federal Tax Payment System) to make tax deposits.
https://www.irs.gov/payments/eftps-the-electronic-federal-tax-payment-system
Deposit Schedule for New Employers
To choose your deposit schedule in 2024, as a new employer, your lookback July 1st, 2022, to June 30th, 2023, employment tax liability will be $0. Therefore, you could choose a monthly deposit schedule.
How do you figure out your deposit schedule if you filed Form 944 the past 2 years?
If you are required to file Form 941 in 2024 but were required to file and filed Form 944 Employer Annual Federal Tax Return in 2022 and in 2023, your lookback is Form 944 for 2022-line 9 Total Tax to figure out the deposit schedule to choose at the beginning of 2024.
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