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How to Fill Out Form 941 Employer's Quarterly Federal Tax Return

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Easy Instructions to Prepare Form 941
How to Fill Out Form 941 Employer's Quarterly Federal Tax Return

Employer's Quarterly Federal Tax Return, Form 941 Page 1

If you have even one employee for your arts and crafts business, you have to submit Form 941 four times a years. Keep in mind that if you have incorporated your arts or crafts business, you as owner are considered to be an employee too. The deadline to file is by the end of the month after each calendar quarter: April 30, July 31, October 30 and January 31 of the following year.

Arts and Crafts Business Information

Fill in your employer identification number, name and address in the upper left-hand side of the form. In the right-hand side of the form, check the box for the correct quarter. January, February, March means any payroll your business paid to employees during those three months only. If the employee earned the payroll, but you didn't pay them until April, you do not include those wages in 1st quarter. Ditto for the other three quarters.

Form 941 Part 1

Some of the lines in Part 1 are self-explanatory, so I'm skipping those lines and concentrating on the one that need more explanation. Also, lines that ask for information that isn't applicable to most arts or crafts business will be skipped too. For example, any lines asking for COBRA information,

Ready to get started? Let's get this form filled out!

  • Line 2: Fill in the amount of gross wages you paid during the three month quarter.
  • Line 3: Enter in the amount of federal withholding tax you withheld from each employee's gross wages.
  • Line 5a: Taxable social security wages are capped at a certain dollar amount each year. As a general rule, unless an employee receives more than $100,000 in wages each per year, this is not something you'll need to worry about. Multiply the amount of wages in 5a Column 1 by the tax rate (using the Form 941 on this page as an example, it's .104). Enter that figure into Column 2.
  • Box 5b: This shouldn't ever be relevant for an arts or crafts business. Honestly, I can't ever see this happening, however, if for some reason, you pay your employees tips too, stick the dollar amount of tips paid on this line.
  • Box 5c: There is no limit for taxable Medicare wages so for this box, multiply the amount of gross wages you paid by .029. Enter that figure into Column 2.
  • Line 5d: Figure up the bottom line by totaling the amounts in Column 2.
  • Line 6e: Add together the federal withholding tax from line 3 and the total FICA tax from line 5d. This equals the amount of payroll tax you should have deposited for the quarter.
  • Most arts or crafts businesses won't have to enter any figures in lines 7 through 10, so the next line you have to worry about is line 10. This is the same number as you entered for line 6e.
  • Line 11: Enter in the payroll tax deposits you made for this quarter, including any overpayments you may be carrying forward from prior quarters. Ideally, lines 10 and 11 are the same number.
  • Line 14: If you deposited less than your actually payroll taxes, enter the amount you still owe in this line.
  • Line 15: If you deposited more than you actually owe, enter your overpayment on line 15. You can opt to apply the overpayment to the next quarter or receive a refund. Unless you are closing your arts or crafts business, I don't see the point in asking for a refund as the overpayment reduces the amount of money you need to deposit for the next quarter. This gives you an immediate cash benefit rather than waiting for your refund to arrive.

Check out these articles to find out more about FICA tax.

If you are new to preparing payroll checks, see my guide to preparing a gross and net payroll check.

You're not done yet! The next article in this series shows you how to fill out Form 941, Page 2.

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