Small Business Tax Tips: Are You Ready For The January 31 Deadline?
April 15 is not the only critical tax deadline
. If you are a small business owner with workers or freelance contractors, January thirty one is an important tax deadline you can not afford to ignore.
The top of January is that the due date for many payroll-connected tax forms and tax payments. Before reviewing them, here's some smart news. Whenever a federal tax deadline falls on a Saturday, Sunday or legal vacation, the due date is automatically moved to the next business day.
Since January 31, 2009 is a Saturday, the due date has been extended to Monday, February two, 2009. (Perhaps those two additional days will return in handy!) Conjointly keep in mind that to accommodates any federal tax deadline, your mailing must be postmarked on or before the due date.
Here are the key federal payroll forms and tax payments due on February 2, 2009:
1. Form 941, Employer's Quarterly Federal Tax Return. This can be the form used to report all employee compensation (wages, salaries, commissions, bonuses, etc) throughout the fourth quarter, along with federal income tax withholdings, social security taxes and medicare taxes (both the worker's withholding quantity and therefore the employer's match).
If the quarter's total tax (as shown on Line ten) is a lot of than $2,500, then you should are creating payroll tax payments throughout the quarter per the IRS payroll tax payment requirements. (See IRS Publication 15 for details on that.)
But if the quarter's total tax is less than $a pair of,500, you'll be able to pay your entire quarterly payroll tax liability with Type 941. Just be positive to include voucher Type 941-V with the come back and create your check payable to the U.S. Treasury.
2. Type 940, Employer's Annual Federal Unemployment (FUTA) Tax Return. This is often the form used to report federal unemployment tax, that employers' should pay (i.e. out of your own pocket) on behalf of each employee. The tax is usually 0.8% of the primary $seven,000 in wages paid to each employee every year. Thus the foremost you pay for anyone employee is $56, assuming the employee had at least $7,000 in wages.
The Form 940 is only filed annually. However the 940 tax should be paid at the end of any quarter in that the unemployment tax liability reaches $500. Thus you ought to be calculating the tax every quarter to work out what your liability is. If it reaches $five hundred, build a payment by the end of the month following the tip of the quarter. If it's but $500, you carry over the liability to the next quarter.
Most tiny businesses that have fewer than ten employees sometimes do not have to form a federal unemployment tax payment for quarters 1, 2 or 3. But when the 4th quarter rolls around you will need to pay the whole annual tax liability. If your total annual tax is $500 or less, you'll be able to pay it with the Type 940 (be positive to incorporate voucher Form 940-V). If the tax is a lot of than $500, you want to pay the tax at your local bank or via the IRS electronic payment system (EFTPS).
3. Kind W-two, Wage and Tax Statement. You must give or mail W-2's to any or all your workers no later than February a pair of, 2009. Employers should embrace Copy B, Copy C and Copy two together with the Directions for Employee. In addition, you must send a copy of all W-a pair of's to the Social Security Administration by March two, 2009, along with Form W-3, Transmittal of Wage and Tax Statements.
4. Type 1099-MISC, Miscellaneous Income. The most common use of this kind is to report total annual payments to independent contractors (sole proprietors who provided services to your business) of $600 or more. You need to send Copy B of the 1099-MISC to the recipient by February a pair of, 2009. And you want to conjointly send Copy A to the IRS by March two, 2009, together with Kind 1096.
Important: Your state most likely has payroll tax forms and payments due on January 31 or February two, therefore be positive to check together with your state's tax department for details.
Small Business Tax Tips: Are You Ready For The January 31 Deadline?
By: UBAYNNA
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