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Table of Contents

GENERAL 1

SCHEDULE 1

DATA SOURCES 1

941 WORKSHEET FOR A QUARTER 2

How to Complete the Worksheet 4

PREPARING THE FORM 941 AND SCHEDULE B 5

GENERAL

The Form 941, Employer’s Quarterly Federal Tax Return, is used to perform a reconciliation (e.g. true-up) of the total federal tax payments made by an employer during a quarter to the quarterly tax liability as calculated on the Form 941. Any difference between the two is handled either as a credit on the next return (overpayment) or an additional remittance to the IRS (underpayment).

Federal tax is the total of Federal Income Tax (FIT) withholding, OASDI tax (both employee and employer amounts) and Medicare tax (both employee and employer amounts).

Tax payments and tax liabilities are not the same thing. A tax payment is the Federal tax amount (as defined above) for an individual pay cycle (e.g. confirm) that is sent (remitted) to the IRS following the close of each pay period. The remittance amount is the sum of the FIT, OASDI and Medicare amounts detailed on the US Payroll Summary (PY4150018H) produced each pay period. A federal tax liability is the amount which the IRS determines is owed for a given period of time; in this case, as calculated by the formula on the Form 941. This may or may not be what was actually remitted during the quarter. When the sum of all pay period payments made during the quarter is greater than the calculated liability, the difference can be applied to the next return or taken as a refund. If the calculated liability is greater, then the difference must be remitted to the IRS.

SCHEDULE

The Form 941 is due by the end of the month following the last day of the quarter.

|OTR |ENDS |DUE BY |

|1 |March 31 |April 30 |

|2 |June 30 |July 31 |

|3 |September 30 |October 31 |

|4 |December 31 |January 31 |

DATA SOURCES

Payroll Balance Sheet

The data contained on the Payroll Balance Sheet is used to complete the 941 Worksheet. See HRPYR-TX-WKLY-10 for procedures regarding the Payroll Balance Sheet.

TX4150004, Multiple Worksite Report

Use to complete the number of employees line on the Form 941.

941 WORKSHEET FOR A QUARTER

The 941 Worksheet for A Quarter is used to collect the pay period wage and tax information that is necessary to complete the Form 941 at the end of the quarter. The line numbers and line text replicates what is on the Form 941. The Worksheet contains 4 sections:

• One for each month in the quarter. Each month is divided into two pay periods. The wage and tax information for pay periods is entered into the pay period sections: the 1st pay period in the month in the first section and the second pay period in the month in the second pay period.

• One section for the quarterly information which will be placed on the Form 941. The quarterly data is a summary for the 3 months detailed on the same worksheet.

The Worksheet is constructed so that very little information needs to be entered manually.

• The pay period wage and tax information in each pay period section is extracted from the Payroll Balance Sheet by linking to the appropriate cells in the Payroll Balance Sheet.

• Various pay period and monthly totals as well as the majority of the totals for the Quarterly section are computed automatically based on formulae contained in the Worksheet.

• Several figures in the Quarterly section are linked back to totals for each of the months.

Consequently, the Worksheet is protected and many of the cells containing the data are locked to prevent the formulae and links from being disturbed.

The following diagrams identify how each cell is set-up within each section. Only Line 11, Total deposits this quarter…, in the For The Quarter section requires a manual entry.

Key: PBS = Payroll Balance Sheet

Payroll Ending Date Sections: 2 for each month in the quarter

|PAYROLL ENDING DATE: | Link to PBS |  | | |  |

|  | | | | | | |  |

|2. Wages, tips, and other compensation | | |2 | Link to PBS |

|  | | | | | | |  |

|3. Total income tax withheld from line 2 | | |3 | Link to PBS |

|  | | | | | | |  |

|  | | |Column 1 | |Column 2 | |  |

|5a. Taxable social security wages |Link to PBS |x.124 |Calculated | |  |

|  | | | | | | |  |

|5c. Taxable Medicare wages |Link to PBS |x.029 |Calculated | |  |

|  | | | | | | |  |

|5d. Total social security & Medicare taxes (Column 2, 5a + 5c) |5d |Calculated |

|  | | | | | | |  |

|6. Total taxes before adjustments (lines 3 + 5d) | | |6 |Calculated |

|  |  |  |  |  |  |  |  |

1 Tax Liability Total section per Month

|Tax Liability | |MONTH x (where | |Calculated |

| | |x=1,2,3) | | |

For the Quarter section: 1 for each Quarter

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|1 |OPEN the Master Worksheet |

| |Location: H:\Payroll Process & Procedures\Taxes\941 forms\Master 941 Worksheet.xls |

|2 |SAVE AS Qtr X in the current year’s folder (H:\Payroll Process & Procedures\Taxes\941 forms\[current year folder] where x is the |

| |current quarter’s number (1,2,3 or 4) |

|3 |Shrink the new Worksheet |

|4 |OPEN the Payroll Balance Sheet |

| |Location: H:\Payroll Process & Procedures\Taxes\Balance sheet\Master.xls |

|5 |Shrink the Balance sheet so that both the Balance Sheet and the 941 Worksheet are on the same screen. This will make it easier to |

| |move between the two. |

|6 |LINK from the Payroll Balance Sheet to the 941 Worksheet: |

| |Payrolls ( Payroll Ending Date |

| |Total Income ( Line 2 Wages, Tips |

| |Federal Tax ( Line 3 Total income tax |

| |OASDI Wages ( Line 5a, column 1 Taxable social security wages |

| |Medicare Wages ( Line 5c, column 1 Taxable Medicare wages |

| | |

| | |

| | |

| | |

| 7 |SAVE AS in the folder and as the file used in Step 2 above |

For pay periods in the current quarter after the 1st pay period

|Step |Activity |

|1 |OPEN the 941Worksheet for the current quarter |

| |Location: H:\Payroll Process & Procedures\Taxes\941 forms\ [yyyy]\[current quarter’s file] |

| |where yyyy = current year |

|2 |Shrink the new Worksheet |

|3 |OPEN the Payroll Balance Sheet |

| |Location: H:\Payroll Process & Procedures\Taxes\Balance sheet\Master.xls |

|4 |Shrink the Balance sheet so that both the Balance Sheet and the 941 Worksheet are on the same screen. This will make it easier to |

| |move between the two. |

|5 |LINK from the Payroll Balance Sheet to the 941 Worksheet: |

| |Payrolls ( Payroll Ending Date |

| |Total Income ( Line 2 Wages, Tips |

| |Federal Tax ( Line 3 Total income tax |

| |OASDI Wages ( Line 5a, column 1 Taxable social security wages |

| |Medicare Wages ( Line 5c, column 1 Taxable Medicare wages |

|6 |Pay Date = date employee receive pay for the pay period |

|7 |If it is the end of the quarter and the final pay period section has been completed, proceed with the next steps. If not, SAVE AS in |

| |the folder and file opened in Step 1 above |

| |At the end of the quarter |

|8 |COPY from the Payroll Balance Sheet to the 941 Worksheet: |

| |Total Tax Deposits QTD ( Line 11 Total Tax Deposits |

|9 |OPEN the Form 941 for the prior quarter |

| |Location: H:\Payroll Process & Procedures\Taxes\941 forms\yyyy]\Qtr q 941.pdf |

| |Where yyyy = year and q = quarter number |

|10 |If Line 15 contains an amount, COPY the amount to Line 11b of the Worksheet |

|11 |SAVE in the folder and file opened in Step 1 above and leave the Worksheet Open. |

|12 |Prepare the Form 941and Schedule B |

PREPARING THE FORM 941 AND SCHEDULE B

Location: H:\Payroll Process & Procedures\Taxes\941 forms\f941.pdf and

H:\Payroll Process & Procedures\Taxes\941 forms\f941Sch B.pdf

These are the preferred forms as the recurring information has already been completed. They

should only be replaced when the IRS revises the form.

or

>More Forms and Publications>Form and instruction number(PDF) – Enter 941 in the FIND

box and then select the most current version of the form 941 or Schedule B. All employer

information will have to be completed as well as the quarterly tax data.

The Form 941 and the Schedule B are PDF forms which can be completed on screen and then printed. The Form 941 reconciles the tax deposits made periodically during the quarter to the tax liability as calculated on the Form 941. Schedule B details the individual pay period tax deposits as well as in total for the quarter. The total on the Schedule B must equal the total shown on Line 10 of the Form 941.

The Form 941 is prepared using the data contained in the ‘For The Quarter’ section of the 941 Worksheet. Complete the forms as follows:

Form 941

|Step |Activity |

|1 |OPEN the Master Form 941 and shrink |

| |Location: H:\Payroll Process & Procedures\Taxes\941 forms\f941.pdf |

|2 |SAVE AS |

| |Location: H:\Payroll Process & Procedures\Taxes\941 forms\ [yyyy]\f941 qtr#.pdf |

| |where # is the current quarter |

|3 |The current quarter’s 941 Worksheet should be open. If not, open and shrink it so that both the Worksheet and the Form 941 are |

| |displayed on screen. |

| |Location: H:\Payroll Process & Procedures\Taxes\941 forms\ [yyyy]\[current quarter’s file] |

| |where yyyy = current year |

|4 |In the Report for this Quarter box, Point and Click on the box next to the number of the quarter to make a check mark appear |

| |indicating the quarter months being reported. |

|5 |Go to Document Direct |

|6 |Open and print the TX4150004, Multiple Worksite Report |

|7 |Complete line 1 using the TX4150004, Company Total for last month of quarter (March, June, September, December) |

|8 |Enter lines 2 through 13 and Months 1, 2 and 3 from the Form 941 Worksheet, For The Quarter section to the same corresponding line |

| |numbers in of the Form 941. The data cannot be copied because the decimal point on the Form 941 is fixed. |

|9 |The Balance Due and Overpayment amount are automatically calculated: |

| |Line 14, Balance Due is populated: If this amount is less than $1, then nothing is due. Otherwise, see the Balance Due section of |

| |the 941 Instructions on the IRS website. |

| |Line 15, Overpayment is populated (not zero): POINT and CLICK on the box next to ‘Apply to next return’ |

|10 |In Part 2 for line 17, click ON the box for the ‘You were a semimonthly depositor…’ |

|11 |SAVE AS same location/file as in Step 2 |

| 12 |Open 941 Worksheet to full screen size and SAVE AS the 941 Worksheet in the same folder/file name as was opened when starting the |

| |Worksheet preparation outlined above |

|13 |Prepare Schedule B |

Schedule B

|Step |Activity |

|1 |OPEN the Master Schedule B and shrink |

| |Location: H:\Payroll Process & Procedures\Taxes\941 forms\f941 Sch B.pdf |

|2 |SAVE AS |

| |Location: H:\Payroll Process & Procedures\Taxes\941 forms\ [yyyy]\Sch B qtr#.pdf |

| |where # is the current quarter |

|3 |From the Worksheet, Enter each individual pay periods’ Total Taxes amount on the Schedule B line for the date shown in the |

| |Worksheet’s Date Paid box for the pay period. |

|4 |Enter |

| |Worksheet Total Liability for the Quarter line ( Schedule B Total liability for quarter box |

|5 |SAVE AS same folder/file name as in Step 2 |

|6 | PRINT |

| |Form 941 (x2) |

| |Schedule B (x2) |

| |941 Worksheet |

| |Payroll Balance Sheet |

|7 |SIGN both copies of the Form 941 |

|8 |Follow the 941 Instructions for making a payment if a BALANCE DUE amount is shown on the Form 941. |

|9 |Mail one Form 941 and Schedule B to |

| | |

| |Department of the Treasury |

| |Internal Revenue Service |

| |Ogden, UT 84201-0005 |

|10 |Attach the TX4150004 to the copies from Step 6 and FILE |

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To perform the link:

1. Enter an equal sign (=) in the 941 Worksheet cell

2. Click on the Payroll Balance Sheet cell with the amount- a link formula to the Balance Sheet cell will appear in the Worksheet

3. ENTER – the amount will appear in the Worksheet cell

4.

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