When you’re running a business, there can be a lot on your plate all year round, and we’re not talking about all the holiday baking. One major requirement is that you need to file the Employer’s Quarterly Federal Tax Return, Form 941, every quarter. As an employer, IRS penalties are the last thing you should have to be worrying about.
Here is everything you need to know about late filing and late payment penalties and how to avoid them when you meet your IRS Form 941 deadline this season.
Form 941 Late Filing Penalties
If you fail to file Form 941 by the due date, you’ll be charged 5% of the total taxes you owe the IRS, every month that your form is late. The IRS continues this 5% charge for 5 months following your missed deadline. The most you can get charged is 25% of the total amount you owe. After maximum penalties, the IRS can start to seize your business’s assets.
Form 941 Late Payment Penalties
When you file Form 941, you also need to deposit employment taxes. Those payments are due on the same dates as your forms, and the penalties can be just as inconvenient for your business.
For payments that are 1-5 days late, the IRS fines 2% of the total amount due. If you are 6-15 days late, the penalty becomes 5%. Once your payment is 16 days late, your fine is 10%. After that, the IRS gives a final warning and then charges you an additional 15%, which you are required to pay immediately.
How to Avoid IRS Penalties
The best way to avoid penalties on Form 941 is to meet your deadline and make your payments on time.
There are a few things that can cause you to miss your Form 941 deadline. One of them is running into all the new fields on Form 941 and getting stuck. The IRS recently updated Form 941 several times to accommodate for COVID-19 tax relief, and if you’re not prepared, it can be a lot to figure out. Click here for a rundown on what to expect when you file Form 941 for your third quarter.
If you do run into questions while you’re filing Form 941 this quarter, you can always contact the ExpressEfile team for reliable answers and live, U.S.-based email support. E-filing is a great way to fulfil your requirements super easily and cut down your risk of getting penalized by the IRS in the first place. Visit this blog for 5 more reasons to e-file.
When you file Form 941 online with ExpressEfile, our build in error check scans for mistakes that could cause the IRS to mark you as having forgotten to file. With instant notifications, you’ll always know the status of your return. If the IRS rejects your form, you’ll know that you need to refile immediately.
Since filing Form 941 online sends your return directly to the IRS in just a few clicks, mailing lag times won’t make you late. You’ll also get deadline reminders so you never miss a due date.
What to Do If You Get Penalized
We’ve all been there: you’re having a busy quarter and filing Form 941 and making your tax payment slips your mind. Suddenly, in addition to everything else, you’re facing IRS penalties.
Once you get penalized by the IRS, the best policy is to file your Form 941 and make any required payments as fast as possible. E-filing gets your form to the IRS instantly so you can stop penalties quickly. For more tips on making a plan when you miss your IRS Form 941 deadline, click here.
Whether you’re racing to e-file Form 941 before your deadline or facing penalties, ExpressEfile is here to help you resolve any issues and keep your business in good standing with the IRS.