Form 944, the Employer’s Annual Federal Tax Return, is designed for small businesses that expect to owe less than $1,000 in federal employment taxes for the year. This form simplifies reporting and payment processes for eligible employers, allowing them to report their annual payroll taxes in a single submission instead of quarterly filings. Below are three diverse examples of how Form 944 is used in different business contexts.
Context: Jane owns a small retail store, Jane’s Boutique, which has a small staff and generates modest annual revenue. After reviewing her payroll records, she determines that her annual federal employment tax liability will be less than $1,000, making her eligible to file Form 944.
Jane collects her payroll data for the year, including wages paid, Social Security tax withheld, and Medicare tax withheld. She carefully fills out Form 944, reporting a total of \(25,000 in wages paid to her employees, with \)1,550 withheld for Social Security and $362.50 for Medicare. She also verifies that she has made timely tax deposits throughout the year.
After completing the form, Jane submits it to the IRS by the due date of January 31 of the following year.
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Context: Community Helpers, a non-profit organization, employs several part-time staff members to assist with various community outreach programs. Given their funding structure and employee count, they expect to owe less than $1,000 in federal employment taxes annually.
The organization’s accountant compiles the payroll details, revealing that \(40,000 in wages were paid during the year, with \)2,480 withheld for Social Security and $580 for Medicare. Recognizing their eligibility for Form 944, the accountant completes the form, ensuring to report these amounts accurately.
Community Helpers files Form 944 by the deadline, ensuring compliance with federal tax regulations while benefiting from the streamlined filing process.
Notes:
Context: Tom runs a seasonal landscaping business, Green Thumb Landscaping, that operates primarily during the summer months. His workforce varies, but for the most recent year, he employed five workers and anticipates his total federal employment tax liability will be under $1,000.
At the end of the summer, Tom gathers payroll data showing total wages of \(35,000 paid to his employees. Federal taxes withheld include \)2,170 for Social Security and $507.50 for Medicare. Since he qualifies for Form 944, Tom meticulously fills out the form, ensuring all figures are accurate and reflective of the payroll periods.
Tom submits Form 944 on time, allowing him to meet his tax obligations without the need for multiple quarterly filings.
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